budget carrier EasyJet is
warning it is unlikely to hit its outlook for 20% full-year pre-tax profit
growth if fuel prices continue to rise at current levels.
In February EasyJet
forecast that its interim pre-tax margins – excluding the impact of its
acquisition of GB Airways – would decline by two to three percentage points,
largely due to increased fuel costs. For the full-year the Luton-based carrier
maintained its forecast for 20% underlying pre-tax profit growth.
EasyJet says the summer
2008 forward price for jet fuel has since risen from $840 to $1,000 per tonne.
Although it has 40% of its fuel needs hedged at $750 per tonne, the budget
carrier warns that if prices continue to rise
it will take an additional £45 million ($90 million) second half hit.
adds that such a large and immediate increase is unlikely to be offset by
short-term cost and revenue improvements, forcing it to downgrade its full-year
pre-tax profit guidance.
EasyJet CEO Andy Harrison says:
“First half results will be in line with our expectations, however it is pretty
obvious that if the recent significant rise in the fuel price is maintained
then our second half profits will be lower than we had previously expected.
course the price of fuel will hit all airlines and we remain convinced that the
combination of our new fuel efficient aircraft fleet, together with the proven
strength of the EasyJet
business model will mean that we shall emerge as winners in a high oil price environment.”
airline says its revenues have continued to perform well, and adds that its
Easter trading is on track, leaving its interim forecast unchanged. EasyJet is due to report its
interim results on 7 May.
says: “Currently, around 27% of EasyJet’s
summer seats are sold which is slightly ahead of last year and the positive
outlook for total revenue per seat in the second half of the year remains