EasyJet reported a significant earnings contraction in its second quarter, with pre-tax profits falling to £85m from £286m in the comparable period a year prior. The decline reflected fuel expenses that increased by £105m following the outbreak of hostilities in the Middle East in late February, which triggered sharp increases in energy prices across global markets.
The airline is currently the subject of competing acquisition offers from two US investment firms. EasyJet’s board initially endorsed an offer from Castlelake valued at £5.5bn but subsequently recommended a higher proposal from Apollo Global Management worth £5.7bn, or approximately £7 per share. A potential review of airline ownership rules by European regulators has introduced uncertainty regarding whether either transaction will proceed as planned.
Booking patterns have begun to stabilize, though passengers continue to delay their reservations until closer to their departure dates. The company indicated that its financial trajectory for the remainder of the fiscal year will depend on customer demand during peak travel periods and the volatile price environment for jet fuel. Chief executive Kenton Jarvis expressed confidence that bookings would strengthen during peak summer months, noting that fares averaged approximately 1% lower than the prior year despite substantial cost increases.
Competitor Ryanair similarly experienced profit pressure, reporting a 34% decline in earnings for the three-month period ending in June, primarily due to jet fuel costs doubling during the regional conflict. The budget carrier indicated that consumer confidence was improving heading into the summer travel season.
Shares in easyJet gained more than 5% in early trading following the earnings announcement, partially recovering from an 11% decline the previous day linked to reports of potential EU regulatory changes affecting airline ownership structures. The timing and implementation of any new ownership regulations remain uncertain, with initial proposals not anticipated until later in the year or early in the following year.
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