Low-cost airline easyJet announced a significant earnings decline in its latest quarterly results, with pre-tax profits falling to £85m for the period between April and June, compared to £286m during the equivalent timeframe in the prior year. The carrier attributed the drop primarily to elevated fuel expenses, which increased by £105m following the escalation of hostilities in the Middle East region that began in late February and drove global energy prices higher.
The profit decline emerged mere weeks after easyJet’s board navigated competing acquisition proposals from two US investment firms. The board initially accepted a bid from Castlelake valued at £5.5bn but subsequently recommended a higher offer from Apollo Global Management worth £5.7bn, or more than £7 per share. However, the potential takeover faced complications from an anticipated EU examination of airline ownership structures that could affect deal approval.
The airline reported that passenger demand showed signs of recovery, though travelers continued exhibiting a pattern of reserving flights closer to their departure dates rather than in advance. Management stated that customer bookings had started trending upward but cautioned that near-term performance would depend on future reservation activity and fuel price movements, which remained unpredictable.
EasyJet’s financial performance reflected broader industry challenges, as competitor Ryanair reported a 34% decline in quarterly profits to €538m during the same period, also attributing the shortfall to doubled jet fuel costs stemming from Middle East developments. Chief executive Kenton Jarvis indicated optimism about August bookings and noted that ticket pricing remained competitive despite the substantial cost pressures. He also reported that anticipated disruptions from Europe’s new entry-exit system had not materialized significantly during early summer, though he urged airports to maintain flexibility and extend the system’s implementation deadline beyond September to accommodate peak travel periods.
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