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easyJet profit falls 70% as fuel costs surge after Iran war
The budget carrier posted a £85m pre tax profit for April to June, down from £286m a year earlier, as fuel costs rose by £105m.
EasyJet reported a 70% plunge in pre tax profit to £85m for the three months from April to June, compared with £286m in the same period a year earlier, blaming soaring fuel costs and later customer bookings tied to the conflict in Iran, Guardian Business reports.
The airline said fuel costs increased by £105m after hostilities in the Middle East began in late February and sent energy prices sharply higher. It also noted that bookings had started to improve, but passengers continued to book closer to departure.
easyJet added that its outlook for the rest of the financial year depends on remaining bookings and continued fuel price volatility. The company is also dealing with uncertainty around a takeover, with two US investment firms competing over the purchase after easyJet accepted Apollo Global Management’s higher £5.7bn bid over Castlelake’s £5.5bn offer.
In parallel, easyJet said it had seen rising consumer confidence during the peak summer period, though it conceded travelers were looking for good deals to book ahead. Despite the profit drop, shares rose more than 5% in early trading, partially offsetting a previous day decline linked to expectations of a potential EU review of airline ownership.