By Scott Kanowsky
Investing.com -- easyJet PLC (LON:EZJ) has posted a full-year loss and scrapped its 2022 dividend, as the U.K. low-cost airline was hit by surging fuel costs that outweighed a rebound in passenger demand following the easing of COVID-19 travel restrictions.
The headline pre-tax loss for the 12-month period to September 30 came in at £178 million (£1 = $1.2038), although that mark narrowed from a steep decline of £1.1B in 2021.
Total revenue over this timeframe nearly tripled to about £5.8B, driven by an uptick in the number of passengers flying with easyJet after many governments in Europe lifted most COVID-era rules on air travel.
However, group costs ballooned by 129% to just over £5.9B, due in part to a sharp jump in fuel expenses. The firm also booked a £64M loss from balance sheet revaluations due to a decline in the value of the British pound, along with a £78M charge from incremental disruption costs.
"easyJet, alongside the whole industry, has faced multiple headwinds throughout the 2022 financial year from Omicron, the impact of Russia's invasion of Ukraine, and operational challenges as demand returned at scale following the widespread removal of travel restrictions across Europe," the company said in a statement.
easyJet flagged that it will not be recommending an annual dividend payout because of the loss.
It noted as well that winter trading - which typically sees weaker performance - is being impacted by surging fuel prices, recent strength in the U.S. dollar against the pound and higher wages. But demand during peak holiday periods, including the key Christmas week in the U.K., has recovered to pre-pandemic levels.
The carrier warned that fuel prices in the first half of its 2023 fiscal year are expected to rise by more than 50% annually, adding that inflationary pressures will continue to weigh on the aviation sector as a whole. But capacity is seen growing throughout the year, with fourth quarter passenger traffic eventually returning to pre-COVID levels.
Shares in easyJet slumped in early trading on Tuesday.