Losses double at easyJet
07.05.08
easyJet announced today that the record price of oil is continuing to dent its profits. However, its Chief Executive said if fuel prices remain at record levels, 'weaker competitors will disappear' and 'easyJet will emerge stronger'.
For the 6 months to 31 March the budget airline made a £57.5m loss, including £9.1m of costs from its purchase of GB Airways, against losses of £17.1m the previous year. Fuel costs in the April to September are set to increase by at least £45m, and will rise by an extra £2.5m for every $10 rise in the price of a barrel of oil, the airline said.
easyJet usually makes a loss in the first half of its financial year, making profits in the busier summer months. The airline said that passenger numbers in the first half of the year rose by 15 percent to 18.9 million, while the load factor -- a measure of how full it planes were - held steady at 81 percent. Revenue grew 24 percent to £892.2m and forward bookings for this summer are ‘slightly’ ahead of last year.
The budget airline's chief executive Andy Harrison, said that the price of jet fuel has risen 35 percent over the last 3 months and is now 80 percent higher than last year. However, he said this would have more impact on competitors than on easyJet.
He said: ‘Nobody knows how much of this [fuel price] increase is driven by short-term financial speculation and how much is a longer-term increase. What is certain is that if these fuel prices are maintained, many of our weaker competitors will disappear and easyJet will emerge even stronger, reflecting the combination of our business model, our cost advantage, our fuel-efficient fleet and the strength of our network.’
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