EasyJet has warned that the conflict in the Middle East is driving up fuel costs and affecting bookings, which will hit its profits. The budget airline reported that fuel costs have increased by £25 million in the past month alone, and it expects a pre-tax loss of £540-£560 million for the six months to March, up from £394 million in the same period last year.
The airline said it remains confident in its fuel supply, having hedged 70% of its needs for the rest of the financial year to September. However, it noted that each $100 movement in the spot price of jet fuel per metric tonne adds £40 million in costs for its unhedged supply, and the current price is about $800 higher than before the conflict began.
Chief executive Kenton Jarvis said demand remains strong in the short term, but customers are delaying bookings due to economic uncertainty. He dismissed speculation about potential flight cancellations, stating that the airline has visibility to mid-May and has no concerns. Jarvis added that there has been a shift in demand from the eastern Mediterranean to the western Mediterranean, following an initial drop in places like Egypt, Turkey, and Cyprus after the drone incident in Akrotiri.
EasyJet reported that its financial performance worsened year on year, impacted by the Middle East conflict and competitive pressures in some markets. Despite this, the airline experienced its busiest Easter holiday period ever and continues its operational ramp-up into peak summer.
