London (AFP) – British no-frills airline EasyJet said Thursday that its losses deepened in the six months to end-March after the Middle East war sent jet fuel prices soaring. The headline loss after tax came in at £377 million ($506 million) for the first half of its financial year, a rise of 27 percent from the period a year earlier, as the US-Iran conflict also upended travel plans, the carrier said. Revenue jumped 12 percent to £3.954 billion as passenger numbers rose six percent over the reporting period. The group said it was also buoyed by strong growth for its package holidays.
EasyJet said “it has been impacted by the Middle East conflict through higher fuel costs and lower forward visibility.” It confirmed an estimate given in April that the war had increased fuel costs by £25 million. While the group saw no disruption to fuel supplies, the second half of its financial year “will be impacted by the conflict in the Middle East, with higher fuel costs and near‑term uncertainty around customer demand.” “Overall bookings for the summer period are behind where they were at this point last year,” it added.
EasyJet said its first-half performance was also impacted by a £32 million “increase in legal provisions across a number of historic cases.” Chief executive Kenton Jarvis said that “despite conflict in the Middle East creating near‑term uncertainty, EasyJet is well placed to manage the current environment.” He added in a call with journalists that minimum ticket prices would rise for the quieter winter season. Following the updates, EasyJet’s share price traded up 0.8 percent.
“The picture remains challenging,” said Aarin Chiekrie, an equity analyst at Hargreaves Lansdown. “Demand is taking a hit, with bookings for the second half tracking two percentage points below last year’s levels as sunseekers leave it later to lock in their travel plans,” he said. “Even if the Middle East conflict is resolved in the near term, fuel prices are likely to remain elevated for some time,” he added. EasyJet rival Ryanair on Monday said its annual net profit jumped more than a third but warned that the Middle East war had clouded its outlook for the year ahead.
© 2024 AFP
