British budget airline easyJet warned yesterday that first- half pre-tax losses could double as a result of soaring jet fuel costs but added that it was still on course for another profitable year.
“The economic outlook in Europe remains uncertain and the higher market price of fuel will inevitably put pressure on margins in the short term,” easyJet said in a trading update.
“The usual first-half loss is anticipated to be between £140 million and £160 million (€166 million - €190 million).”
The predicted loss, for the six months to the end of March 2011, compared with a shortfall of £78.7 million in the same part of the previous fiscal year.
The no-frills airline, like many of its competitors, usually posts losses over this period because it covers the seasonally slower months of the year.
For its first quarter to December 2010, however, easyJet said that revenues rose 7.5 per cent to £654 million despite widespread air transport chaos was sparked by freezing weather conditions in Britain and elsewhere.
“Early indications are that second-half unit revenues remain robust and therefore, excluding the additional cost of fuel and assuming no further significant disruption, our full-year expectations remain broadly unchanged.”
Passenger numbers rose 8.8 per cent to 11.9 million people in the first quarter.
“We are on track to be profitable again this year,” a company spokesman said yesterday.
He added: “Our revenues are heading in the right direction, we are going to add more flights this summer on our profitable leisure routes, we are seeing good cost reduction across the business and as a result we remain confident that we will have another year of profitable growth.”
The airline admitted that the harsh cold snap in December had cost the airline about £18 million.
“Against a difficult economic backdrop easyJet was able to deliver a solid trading performance and grow total revenue while improving its position in mainland Europe,” chief executive officer Carolyn McCall said.
For its 2009/2010 financial year, easyJet posted a 70 per cent jump in net profits to £121.3 million, highlighting the aviation sector’s recovery after the global financial crisis. The low-cost group also unveiled plans to increase its fleet by 24 aircraft to 220 by 2013.