EasyJet posts widening of first-half losses, in line with guidance

(Sharecast News) - Budget airline easyJet reported a widening of its first-half losses on Thursday, in line with guidance, as it said its performance so far in the second half has been hit by higher fuel costs due to the Middle East conflict, and lower forward visibility.

In the six months to the end of March, the headline pre-tax loss widened to £552m from £394m in the same period a year earlier, in line with guidance given in April for a loss of £540m to £560m.

The airline said the loss reflects its first winter of operation at Milan Linate and Rome Fiumicino, continued winter capacity investments to drive aircraft utilisation, the competitive overcapacity in specific beach markets and one-offs including £32m of net increased legal provisions and additional fuel costs of £25m.

EasyJet said airline forward bookings have been impacted by escalations in the Middle East, with 58% of second-half bookings sold, down two percentage points from a year earlier.

The company said its performance in the first half was in line with the trading update released last month. Demand for travel remained positive, with airline passengers increasing 6% year-on-year, resulting in a load factor of 90%, up two percentage points on the prior year.

Meanwhile, easyJet holidays continued to see strong demand, with customer numbers up 22% year-on-year.

The company reiterated that the second half will be impacted by the conflict in the Middle East, with higher fuel costs and near‑term uncertainty around customer demand. "We continue to see positive late bookings since the conflict began, however overall bookings for the summer period are behind where they were at this point last year," it said.

Chief executive Kenton Jarvis said: "Despite conflict in the Middle East creating near‑term uncertainty, easyJet is well placed to manage the current environment, supported by one of the strongest investment‑grade balance sheets in European aviation.

"We delivered a strong operational performance in the first half, with positive demand driving a 90% load factor, up 2 ppts versus last year, and further improved customer satisfaction, alongside continued growth in our holidays business.

"EasyJet is not seeing any disruption to fuel supply, we continue to operate normally and our customers should book with confidence, taking advantage of our great value fares.

"Our strategy is clear - through disciplined growth, accelerated upgauging, and continued expansion of easyJet holidays, we aim to bounce back from this year's Middle East related setbacks, and then further progress towards our medium-term financial targets and deliver attractive shareholder returns as the operating environment normalises."

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