Fuel Costs Drag EasyJet Outcomes Down

Low-cost airline EasyJet has reported a half-year loss despite a 25 percent increase in passengers carried and a 26 percent rise in revenue. The cause is not hard to explain: the budget carrier has been hit by high fuel prices and fuel accounts for 18 percent of EasyJet´s total operating costs.

EasyJet remains financially strong and chief executive, Ray Webster, said the results were in line with expectations. The reported pre-tax loss was £31 million, up from £27 million over the same period last year, which will drag down the airline´s prospects for full-year profits at the end of September.

“We have made steady progress on costs and so far mitigated the impact of a higher fuel price,” Webster told investors. “But there is more to do as we seek balanced growth, extending our reach in Europe while protecting our margins. easyJet is a financially strong company and is in a good position to capitalize on the opportunities in the European airline market.”

The first half of the year is always weakest for EasyJet as it covers the winter period when leisure travel dips, compared to the upcoming summer months when the airline should expect to recover. But the fuel costs are a continuing burden and EasyJet expects its fuel bill to climb by an additional £41 million in the next six months.