Low-cost airline easyJet warns of ‘near-term uncertainty’ around jet fuel availability and prices and says it expects half-year losses of up to £560m. Tony McDonough reports
Budget airline easyJet says the war in Iran had created “near-term uncertainty” over the availability and price of jet fuel.
Since the war in Iran began, jet fuel prices have doubled due to the huge slowdown in the number of oil tankers being able to pass through the Strait of Hormuz. On Thursday the head of the International Energy Agency said Europe had just six weeks of jet fuel left.
In an update to the stock exchange easyJet, which operates 41 routes out of Liverpool John Lennon Airport said it expected pre-tax losses for the six months to March 31 to be between £540m and £560m.
Airlines such as easyJet traditionally make a loss in this period as it covers the much quieter winter months. However, the latest forecast mean losses would be significantly higher than £394m reported in the same period a year ago.
In the update easyJet said: “The underlying first‑half result was broadly in line with expectations, with revenue and costs in line, excluding approximately £25m of additional fuel costs in March due to the Middle East conflict.”
Over the past year easyJet has continued to expand its base at Liverpool and is adding another aircraft to its base at the airport this year – taking the Liverpool aircraft fleet to nine.
In late March it announced another new route, to the Spanish city of Seville. This new service to the Andalusian capital will operate twice a week on Thursdays and Sundays and will take off on August 2.
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In the latest statement easyJet added: “The conflict in the Middle East has introduced near-term uncertainty around fuel costs and customer demand. As expected, the booking curve has shortened in recent weeks, resulting in lower than normal forward visibility.
“EasyJet remains well positioned to manage this volatility, supported by its investment grade balance sheet. The group has net cash of £434m, liquidity of £4.7bn and owns 86% of its neo aircraft, providing both financial and operational flexibility.”