Fuel cost surge adds to Easyjet's problems

20th Jan 2011 07:23

Shares in Easyjet dived after snow and strike disruption cost the budget airline £31m in the last quarter of 2010 and it predicted that soaring fuel costs would hit its results this year.Total revenue was up by 7.5% from the same period the previous year at £654m but the disruption costs were bigger than anticipated."Disruption from ATC (air traffic control) strike action and severe weather cost £6m and £18m respectively and in addition led to lost contribution of £7m," the company said.Seats flown during the quarter grew by 7.7% to 13.8m while total revenue per seat was flat at £47.48.Passengers carried increased by 8.8 % to 11.9m, with 59% of passengers originating outside the UK. The load factor increased by 0.9 percentage points to 86.7%.The airline said that, with the current price of jet fuel at $897 (£561) a metric tonne compared to $681 a metric tonne a year ago, the first half loss is anticipated to be "between £140m and £160m, compared to a pre-tax loss of £78.7m in the same period last year."Commenting on the results, chief executive Carolyn McCall said, "Against a difficult economic backdrop aggravated by severe weather and ATC strike action, easyJet was able to deliver a solid trading performance and grow total revenue whilst improving its position in mainland Europe."easyJet said it is working to recover a significant proportion of the additional costs through savings and revenue opportunities.McCall also called "on governments to provide sensible legislation for airport regulation and air traffic control. 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."