Key facts
- EasyJet's profit before tax for the fiscal third quarter fell 70% to £85 million ($114 million) from £286 million a year earlier.
- The company's fuel bill increased by £105 million year-on-year.
- EasyJet now expects a headline pre-tax loss of £540m–£560m in the first six months of its financial year, compared with a £394m loss a year earlier.
- The airline incurred £25 million in additional fuel costs in March due to the war in the Middle East.
- Forward bookings have been impacted by the conflict, resulting in a later booking curve and lower forward visibility.
EasyJet Plc reported a 70% decline in profit before tax for its fiscal third quarter, reaching £85 million ($114 million) compared to £286 million a year prior. Despite this drop, the figure surpassed analyst estimates of approximately £80 million. The airline attributed the downturn to significantly higher jet fuel costs, which increased by £105 million year-on-year, and a reduction in consumer demand, influenced by the ongoing conflict in the Middle East.
Looking at the first half of its financial year, EasyJet now anticipates a wider pre-tax loss, projected to be between £540 million and £560 million, an increase from the £394 million loss recorded in the same period last year. The company cited £25 million in extra fuel costs incurred in March due to the war, alongside £30 million in higher legal provisions. The conflict has introduced uncertainty, leading to a shorter booking curve and diminished forward visibility.
Total revenue for the first six months to the end of March rose 12% to £3.95 billion from £3.53 billion a year ago. However, headline costs per available seat kilometre increased by 4.7% to 6.73 pence. EasyJet stated it has £434 million in net cash and £4.7 billion in liquidity, with 86% of its Airbus neo aircraft owned, providing financial and operational flexibility. The airline remains in close contact with fuel suppliers and airports regarding supply. While 70% of its fuel needs for the remainder of the financial year are hedged, each $100 movement in the spot price of jet fuel per metric tonne adds approximately £40 million in costs for unhedged supply, with prices around $800 higher than before the war. CEO Kenton Jarvis expressed confidence in fuel supply diversification and urged passengers to book with confidence.