Investments: easyJet flies more but grounded by sky high oil prices
easyJet flies into high fuel costs
Wednesday, 07 May 2008 11:58
High fuel costs hit easyJet's first half profits, the budget airline revealed today.
Profits plummeted to a loss of £48.4 million, despite a rise in passengers over the six months.
The £48.4 million compares to a loss of £17.1 million last year, and was driven by an increase in the cost of fuel, which went up by £67 million.
Andy Harrison, easyJet chief executive, said: "easyJet continues to grow in size and strength.
"Oil remains the biggest challenge and uncertainty. The price of jet fuel has risen 35 per cent over the last three months and is now 80 per cent higher than last year."
However, the airline remained upbeat and said the challenging conditions would force other carriers to "disappear or downsize".
The industry as a whole is feeling the pinch, and several airlines have declared bankruptcy recently, including Oasis and Eos Airlines.
Passenger numbers have increased by 15 per cent to 18.9 million and total revenue per seat increased by 8.1 per cent over the half.
The increase boosted total revenue by 24 per cent to £892.2 million compared to £719.0 million last year.
The total loss before tax for the first half of 2008 amounted to £57.5 million, including £9.1 million of one-off costs associated with the integration of GB Airways.
Forward bookings for the summer are slightly ahead of last year, easyJet said, despite the credit crunch.
However, pressure on costs will continue, "not least from the unjustifiable increase in airport charges at Gatwick" the airline added.
In addition, the volatile price of oil continues to contribute to costs. In the second half, easyJet predicts its fuel bill will rise by an extra
Sarah Routledge