07 May 2008

Easyjet warns of impact of rising oil prices

Easjyet believes many of its "weaker competitors" will disappear or downsize if oil prices continue to rise.

Unveiling its interim financial results today, the airline's chief executive Andy Harrison said oil remains the biggest challenge and uncertainty.

"The price of jet fuel has risen 35% over the last three months and is now 80% higher than last year," he said.

"Nobody knows how much of this increase is driven by short term financial speculation and how much is a longer term sustainable increase."

"What is certain is that if these fuel increases are maintained many of our weaker competitors will disappear or downsize and easyJet will emerge even stronger reflecting the combination of our business model, our cost advantage, our new fuel efficient fleet and the strength of our network."

For the six months to March 31, easyJet's total revenue grew 24% to Ã&#pound;892.2 million, with underlying pre tax margin in line with expectations.

Passenger numbers increased 15% to 18.9 million and load factors were at 81%, in line with the previous year.

Total revenue per seat (excluding GB Airways and exchange movements) was up 1.5% compared to last year and cost per seat, excluding fuel, GB Airways and exchange movements, was down by 0.9% compared to last year.

Fuel costs rose by 23.8% per seat compared to last year.

Harrison said GB Airways was "smoothly integrated and is delivering larger than expected benefits."

By Bev Fearis