Short-haul airline giant easyJet (LSE:EZJ) was battered during the pandemic. But the easyJet share price has recovered a little from its lockdown lows. The operator of flights in Europe and North Africa is currently trading at 487p having dropped to 400p at the height of the Covid crisis. As airlines do all they can to recruit staff, however, could the forthcoming summer holidays be the growth catalyst that the company and its share price need? Let’s take a closer look.
Cabin crew recruitment
It was announced this week that easyJet is going to pay a £1,000 bonus to cabin crew. While this bonus is available to current employees in an effort to incentivise staying at the firm, it will also be available to new recruits.
The purpose of this is to maintain and increase cabin crew levels as the international travel industry emerges from the pandemic.
Rival airline British Airways has offered similar enticements, notably a £1,000 ‘golden hello’ for new cabin crew.
These efforts come amid numerous flight delays and cancellations caused by low staffing levels after airlines reduced cabin crew when the pandemic hit.
As those airlines scramble for more staff, I think this may suggest that they anticipate a return to relatively normal travel conditions this summer. If they’re right, this could be good news for the easyJet share price.
Increasing capacity
A recent update from the firm for the six months to 31 March also supports the view that international travel is making a return.
The overall message was that the business is still on track to reach approximate pre-pandemic levels in the coming months.
Passenger capacity increased from 50% of 2019 levels in January to 80% in March. What’s more, the load factor grew from 68% to 81% over the same time period.
This tells me that more planes are flying with more passengers on board. In addition, the firm has recently added five new landing slots in Greece.
This will make easyJet the largest carrier to the Greek islands this summer. As a popular holiday destination with relaxed entry requirements, Greece may help easyJet to dramatically increase revenue.
Narrowing losses and shrinking debt
Financially, the business is also showing signs of improvement. Net debt stood at £600m at the end of March, down from £900m on 30 September 2021.
The company expects to record a pre-tax loss for the year ended September 2022 of between £535m and £565m. This is better than analyst expectations of -£618m and last year’s pre-tax loss of £701m.
And although the rising price of oil may make jet fuel more expensive, easyJet has hedged 64% of its jet fuel purchases until September.
This may go some way to shielding the company from surging oil prices. There’s always the risk, however, that future pandemic variants lead to the closure of international travel again. That could dent the share price, even though I do expect it to recover further from here.
Overall, easyJet appears to be a firm that’s looking forward to a much-improved operating environment this summer. While there are still risks, I think if the company can recruit cabin crew quickly then easyJet could be a great addition to my long-term portfolio. I’ll buy shares when I see that this recruitment push has been successful.
