easyJet losses nearly doubled
10.05.11
easyJet reported a near-doubling in losses today, as the budget airline battled higher fuel prices, increased taxes and weakening consumer demand. Pre-tax losses increased 94% to £153 million (up from a loss of £79 million last year) in the six months to March 31, after a surge in the price of jet fuel cost it an extra £43 million and it absorbed an increase in air passenger duty.
Passenger numbers increased 12% to 23.9 million, despite the disruption from the snow in December that caused the widespread cancellation of flights including at its biggest base, Gatwick and a number of air traffic controller strikes. Fuel costs for the six-month period soared to £383 million from £305 million a year ago.
Capacity grew 11% overall, and by just 4% in the UK. The capacity increases at European bases temporarily impacted yield (average fares), although they were offset by a robust revenue performance in the UK, the company said.
Ancillary revenue per seat, which includes checked bag charges and had seen three quarters of declines, was broadly flat at £10.20 per seat for the six-month period. Cost per seat, excluding fuel, fell 2.8% or by 1.2% after taking into account the snow and strike disruptions.
easyJet Chief Executive Carolyn McCall said: ‘The past six months has been tough with sharply rising fuel costs combined with cautious behaviour by consumers and an adverse impact from taxes on passengers.' She added that despite the difficult environment, easyJet has made ‘strong progress’ in implementing its turnaround strategy following a review of the business last year.
A spokesman for the airline said it expects higher fuel costs to drive capacity out of the market and that it is well positioned to emerge with one of the healthiest balance sheets.
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