Low-cost airline easyJet reported a significant decline in profitability for its second quarter, with pre-tax profit dropping to £85m from £286m in the corresponding period of the previous year. The carrier attributed the downturn primarily to fuel costs that increased by £105m following the outbreak of hostilities in the Middle East in late February, which sent global energy prices substantially higher.
The airline is currently the subject of competing acquisition proposals from two US investment firms. EasyJet’s board initially accepted a bid from Castlelake valued at £5.5bn but subsequently recommended a higher offer from Apollo Global Management worth £5.7bn, representing more than £7 per share. The proposed deals have attracted scrutiny, as potential European Union regulatory review of airline ownership rules could impact their completion.
EasyJet management indicated that customer booking patterns have shown improvement, though passengers continue to exhibit delayed booking behavior, with reservations concentrated closer to travel dates. The company noted that outlook for the remainder of its financial year depends on future booking volumes and volatile fuel price movements. Chief executive Kenton Jarvis expressed optimism about booking trends improving during the peak summer season, noting average fares remained approximately 1% lower than the prior year despite substantial fuel cost increases.
The airline’s results align with broader sector challenges, as rival carrier Ryanair reported a 34% profit decline for the same period, also attributable to doubled jet fuel costs stemming from the regional conflict. Despite financial pressures, easyJet shares rose more than 5% in early trading following the results announcement, partly recovering from the previous day’s decline tied to EU regulatory concerns regarding the takeover process.
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