Budget airline EasyJet has reported a sharp fall in quarterly profits after the conflict in the Middle East drove up fuel costs and dented consumer confidence, adding fresh pressure on Europe’s aviation sector.
The airline said pre-tax profit for the three months to the end of June fell 70% to £85 million (€99 million), down from £286 million a year earlier. It attributed the decline to soaring jet fuel prices and weaker booking trends following the outbreak of the regional conflict, which increased its fuel bill by £105 million year-on-year.
Chief executive Kenton Jarvis said EasyJet had continued to manage the impact of the conflict on fuel prices and travel demand, while warning that the group’s full-year performance would depend on volatile fuel markets and the strength of late summer bookings. Although demand weakened earlier in the quarter, the airline said customer confidence has started to recover, with strong last-minute bookings and 68% of its fourth-quarter capacity already sold.
The update comes as EasyJet finds itself at the centre of a takeover battle between US private equity firms Apollo and Castlelake. The airline has backed Apollo’s improved £5.7 billion offer, although the deal could face additional scrutiny after the European Union signalled it is reviewing airline ownership rules, potentially complicating foreign acquisitions of European carriers.
Despite the earnings setback, analysts noted that EasyJet’s operational performance remains resilient, with improving customer satisfaction and expectations that travel demand will strengthen during the peak summer season.
via FT
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