EasyJet Reports £560M Loss, Fuel Costs Soar

Oil prices soared in response to Iran’s actions in the Strait of Hormuz, contributing to the increased costs. Consequently, EasyJet reports bookings are down two percentage points for the three months ending June and September compared to a year ago.

The warning led to EasyJet shares falling 9% in early trading, settling 4% lower. CEO Kenton Jarvis confirmed the worsened H1 performance, citing the Middle East conflict and competitive markets, but emphasized EasyJet's "investment grade balance sheet and £4.7 billion of liquidity" position to navigate challenges.

While EasyJet reports normal airport operations and sufficient short-term fuel visibility, International Energy Agency Executive Director Fatih Birol warned Europe has "maybe six weeks or so (of) jet fuel left," indicating potential flight cancellations if oil supplies remain restricted. The airline also recorded a £30 million net increase in legal provisions from historic cases.

Dan Coatsworth of AJ Bell notes EasyJet's financial resilience but highlights the crisis's uncertain duration as a key factor for future performance.