EasyJet reduces winter losses despite cancellations due to Israel-Gaza conflict

EasyJet said that it has reduced its winter losses to at least £50m, and is confident about a record-breaking summer despite increased fuel costs and the loss of £40m due to the Middle East war.

In a trading update released before the half-year results, the airline stated that it expected pre-tax losses between £340m to £360m in the typically loss-making period of six months ending March.

EasyJet reported that demand for flights has rebounded following a six-week’softening’ in searches and bookings since the Israel/Gaza war began in October.

EasyJet has extended the cancellation of Tel Aviv flights, announced last week in response to Iran’s attack. The airline expects little financial impact in the months to come from its decision.

EasyJet’s summer operations are dominated by the region, which includes Egypt. This is down from 4% to about 0.3% in winter.

An early Easter in March of this year boosted the airline’s profits in the first half, which offset a £140m increase in fuel costs compared to 2023. The airline said that 70% of its fuel was hedged at a price below current prices, which would protect it from the rising cost of oil in 2024.

Johan Lundgren said, “Bookings are continuing to grow and we’re confident that this summer will be a record performance.”

Although the airline hasn’t given a formal profit forecast for the full year, only 30% of peak-season tickets have been sold so far, Lundgren said that analyst consensus was “£100m higher this summer than last summer’s record-breaking summer”.

EasyJet Holidays has grown 35% in the last year, and 70% of summer bookings are already made.

Lundgren stated that easyJet will be one of Europe’s fastest growing airlines this year. New bases in Alicante, Birmingham and other locations would contribute to 94 additional routes. Seat capacity would also increase by 8% per year with the delivery of 16 more Airbus aircrafts in 2024.

He said that reducing winter losses is “a pillar” in the airline’s strategic plan. “I think we surprised the market given that there are two world wars, the high cost of fuel and the cost of living challenges, we can do this, and want to do even more.”

EasyJet shares rose by almost 3% during the early hours of trading on Thursday.