EasyJet Narrows H1 Losses as Traffic Starts Ramping Up to Precoronavirus Levels

No-moat EasyJet expects a first-half 2022 loss before tax of approximately GBP 550 million, lower than the GBP 700 million reported a year ago, and exceeding expectations despite rising fuel costs and the removal of furlough support. Seat capacity for the second quarter was in line with previous guidance of 67% of 2019 levels and reached 80% of precoronavirus levels in March. Load factors have improved to 78% in the second half, from 60% in second-quarter 2021. The improved traffic figures are a result of relaxed restrictions in the U.K. and pent-up demand from passengers. The group continues to expect strong demand over the summer with capacity reaching prepandemic levels in the fourth quarter. EasyJet has lower exposure to Eastern Europe than peers Ryanair and Wizz Air and is well placed to benefit from a continued recovery in air traffic. Shares are trading at a steep discount to our GBX 915 fair value estimate.