EasyJet makes loss amid rising fuel costs and Gatwick drone incident
Higher fuel prices and the Gatwick drone incident caused turbulence for EasyJet in the first half, but the airline said it is on course to deliver annual profits in line with expectations.
The group reported a headline loss before tax of £275 million for the six months to March 31.
Revenue was up 7.3% to £2.34 billion, due to capacity growth and favourable foreign exchange rates.
But growth was held back by the timing of Easter, as well as comparison to last year when Monarch’s bankruptcy and Ryanair cancellations benefited EasyJet.
Total revenue per seat decreased by 6.3% to £50.71.
The company said costs per seat were also higher, up 3.9% to £56.66. This was down to fuel price increases and underlying cost inflation.
The disruption caused by drones at Gatwick Airport in December was also blamed, with EasyJet booking a £10 million direct loss due to the incident.
Chief executive Johan Lundgren said: “I am pleased that despite tougher trading conditions, we flew more than 41 million customers, up 13% on last year, performed well operationally with 54% fewer cancellations in the period and customer satisfaction with our crew is at an all-time high.
“We have also continued to make good progress on our strategic initiatives in holidays, loyalty, business and with data.”
The firm expects profits for the 2019 financial year to be in line with expectations.
It comes after the group warned in April that it would make a loss in the first half amid rising costs and greater uncertainty due to Brexit.
Ed Monk, associate director from Fidelity Personal Investing’s share dealing service, said: “Today’s first half results were at least no worse than those warnings but are grim nonetheless.
“Even an encouraging improvement in customer numbers couldn’t prevent the predicted fall in revenue per seat.”