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Easyjet shares sink as it warns of widening losses | |
(about 1 hour later) | |
Shares in Easyjet have slumped more than 13% after the budget airline warned that higher fuel costs could double half-year losses. | |
It estimated that the loss from October last year to March this year would be between £140m and £160m, compared with a loss of £78.7m a year earlier. | |
The airline also said severe weather in December cost it £18m, while air traffic control strike action in the final three months of 2010 cost £6m. | |
The revenue lost from both was £7m. | |
Despite these factors, Easyjet said revenue in the final quarter of 2010 grew 7.5% to £654m, while passenger numbers were up 8.8% to 11.9 million. | Despite these factors, Easyjet said revenue in the final quarter of 2010 grew 7.5% to £654m, while passenger numbers were up 8.8% to 11.9 million. |
However, it said rising fuel costs would lead to bigger losses in the first-half of the airline's financial year. | |
"The current market price of jet fuel is $897 a metric tonne compared to $681 a metric tonne a year ago and therefore at current jet prices and dollar rates fuel costs are anticipated to be around £1.17 a seat higher than in the first half of last year," the carrier said. | |
Like most northern-hemisphere airlines, Easyjet makes most of its profit during the summer holiday season. | Like most northern-hemisphere airlines, Easyjet makes most of its profit during the summer holiday season. |
Easyjet also said that it gained market share across Europe. | Easyjet also said that it gained market share across Europe. |
"Against a difficult economic backdrop aggravated by severe weather and air traffic control strike action, Easyjet was able to deliver a solid trading performance and grow total revenue whilst improving its position in mainland Europe," said the airline's chief executive, Carolyn McCall. | "Against a difficult economic backdrop aggravated by severe weather and air traffic control strike action, Easyjet was able to deliver a solid trading performance and grow total revenue whilst improving its position in mainland Europe," said the airline's chief executive, Carolyn McCall. |
She also called on the government "to provide sensible legislation for airport regulation and air traffic control". | She also called on the government "to provide sensible legislation for airport regulation and air traffic control". |
The severe weather highlighted the need for airports to invest in infrastructure to keep passengers moving, she added. | The severe weather highlighted the need for airports to invest in infrastructure to keep passengers moving, she added. |