EasyJet reports £552m loss, summer bookings down amid Middle East conflict

EasyJet reported a £552m pre-tax loss for the six months to 31 March, compared with a £394m loss in the same period a year earlier, as the Middle East conflict weighed on consumer confidence and fuel costs. The budget carrier said it spent an unexpected extra £25m on jet fuel in March after the start of the US-Israel war on Iran.

Summer holiday bookings are behind where they were at this point last year, the airline said, with customers waiting until the month of departure to book. “We continue to see positive late bookings since the conflict began; however, overall bookings for the summer period are behind where they were at this point last year,” EasyJet said.

EasyJet has hedged 72% of its fuel needs for the next six months, covering the summer period through September. However, Chief Executive Kenton Jarvis said the company has suspended hedging in the short term due to oil price volatility. “We’ve suspended hedging in the short term because [the oil price is] so volatile that it fell 6% yesterday. It bumps up and down depending on what [Donald] Trump has for breakfast,” Jarvis said.

Jarvis said the airline has no intention of cutting summer flights. EasyJet reviewed its summer schedule in March after the outbreak of the conflict, resulting in a 0.3% net reduction in seats, but now intends to operate its full summer schedule as planned. “We make more than all our profit in 12 [summer] weeks. And therefore there’s nothing that we fly in July, August or September that wouldn’t be contributing positively towards the fixed overheads. If the fuel’s there, we will fly it,” Jarvis said. EasyJet said it does not expect to cancel any further flights this summer.

Jarvis said fuel supplies are not disrupted. “Fuel supplies are diversifying, we are seeing more production in the Americas and Norway,” he said. The airline said it has its usual visibility of supplies over a rolling four-week period.

Jarvis called on European airports to use flexibility given by the European Commission to help passengers avoid long border queues. Some travellers have faced lengthy delays at border checks due to the EU entry-exit system (EES) that came into effect in early April. “It is really inexcusable,” Jarvis said. “I’d encourage border forces and the member states in Europe to use the flexibility that the EC [European Commission] has given them. They don’t need to leave people in long queues. They can just stop using the gates or parallel run using the regular passport stamping procedure.”

EasyJet said it had raised its minimum ticket fare in response to higher fuel costs and was reviewing all discretionary costs. Jarvis said the airline is well placed to manage the current environment, supported by one of the strongest investment-grade balance sheets in European aviation.