easyJet shares slump on higher costs

20th Jan 2011
easyJet shares slump on higher costs

easyJet saw shares slump by nearly 13 per cent this morning as an interim management statement revealed higher fuel costs could double half-year losses.

The low-cost airline estimated the loss for the six months to March this year would be between £140 million and £160 million, compared with a loss of £78.7 million a year earlier.

easyJet was also hit by strike action at air traffic control and severe weather during the period, costing £6 million and £18 million respectively.

The revenue lost from both was some £7 million.

However, total revenue for the period was up 7.5 per cent to £654 million.

“easyJet will always support its passengers when external events impact their journey but we call on governments to provide sensible legislation for airport regulation and air traffic control,” said easyJet chief executive Carolyn McCall.

“The severe snow disruption of the past two years also highlights the need for airports to invest in the appropriate infrastructure to keep passengers moving.”


Looking Forward

easyJet placed an aircraft order with Airbus during the period; with 15 existing A320 aircraft options converted to firm orders, 20 A319 contracted aircraft deliveries converted to A320 deliveries and secured options over a further 33 A320 aircraft bringing the total number of options held by easyJet to 42 aircraft.

The move was, however, criticised by Stelios Haji-Ioannou, the founder of EasyJet.

“We shall see if these 15 incremental aircraft will find deployment on profitable new routes and earn the appropriate return on capital employed.

“I am still hoping to get greater transparency on which routes these and any other new aircraft are to be deployed,” he added, urging easyJet to focus more on earnings per share.


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