EasyJet has warned of sharply wider winter losses after a spike in jet fuel prices linked to turmoil in the Middle East, wiping billions from the market value of Europe’s major airlines. The low-cost carrier reported a first-half loss of about £552 million for the six months to the end of March, a level comparable to the worst periods of the pandemic and around 40 percent deeper than the £394 million loss recorded in the previous winter season.
The shortfall exceeded analysts’ most pessimistic forecasts by as much as £60 million. According to the company, fuel costs rose by more than £25 million in the first half alone, driven by higher crude prices following disruption to oil supplies after the closure of the Strait of Hormuz, a key corridor for global energy shipments. EasyJet said the increase was largely tied to the 18 percent of its kerosene needs that were left unhedged in March.
The airline is currently around 70 percent hedged at an average of $706 per metric tonne of jet fuel, compared with a spot price of roughly $1,500 this week. EasyJet indicated that every $100 rise in unhedged fuel over the next six months would add about £40 million to its costs, prompting expectations that full-year earnings to September will fall well below £500 million.