Staff Shortages Bite EasyJet; Shares Looking Very Attractive

Staff shortages across the aviation industry and the resulting disruptions resulted in GBP 133 million of related costs, driving EasyJet into a headline loss of GBP 114 million for third-quarter fiscal 2022. The airline, which has high exposure to the most disrupted airports, only managed to fly 95% of its planned schedule in the quarter. It has put measures in place to ease the disruptions such as additional crew, wet leases of aircraft, and seat blocking to lower onboard crew count. While disruptions have been eased on a run-rate basis, we believe the absolute costs in fourth quarter could be higher than in third quarter due to the magnitude of passenger numbers over the summer holidays. For perspective, we believe total costs related to the disruption could exceed 10% of EasyJet’s current market value.