Conflicts in the Middle East have cost easyJet more than £40m as a result of flight suspensions and weakening demand, the airline has said.
The company said that, while its year-on-year results had improved, the conflicts in Gaza and the Middle East had hit trading.
In the days after the 7 October attacks in Israel, easyJet was one of a number of carriers that paused flights to Israel and nearby Jordan for safety reasons. These flights have yet to resume.
The airline said the £40m loss was largely because of suspending these flights, with demand for trips to Egypt also affected since the conflict started. The routes make up about 4% of easyJet’s winter flight schedule.
Johan Lundgren, its chief executive, said there were, however, clear signs of recovery in Egypt. “It was definitely impacted hard in the first six or seven weeks, but very quickly bounced back as well.”
Lundgren said in November that the conflict would cause a “short-term industry-wide impact on [flight] searches and bookings”, similar to the effect at the outbreak of war in Ukraine in 2022.
He said on Wednesday: “However horrific these events are from a humanitarian point of view, even if it’s relatively close to the network points, people will take a view – the underlying demand for travel is strong.”
The airline reported a pre-tax loss of £126m in the final quarter of 2023, an improvement on the £133m loss during the same period last year. Airlines typically record seasonal winter losses as demand for holidays and flights drops. Group revenues at easyJet rose by 22% to £1.8bn.
The group’s holiday booking arm, easyJet Holidays, which was launched in 2019, posted a profit of £30m for the final three months of 2023, up from £13m in the same period last year.
The company predicted its first-half results would be up year on year despite the Middle East hit. It said the improved results came from “disciplined capacity growth” where demand was strongest and from productivity benefits.
Lundgren said: “We see positive booking momentum for summer 2024 with travel remaining a priority for consumers.
“Flight and holidays bookings took off strongly during the traditional busy turn of year sales period, as customers opted to secure their summer holidays to firm favourites like Spain and Portugal alongside destinations further afield like Greece and Turkey.”
He said the airline had recorded increased booking volumes, equivalent to filling two planes a minute at peak period, and coming in at higher prices compared with the start of 2022. “Revenue per seat, a combination of load factor and the fares and then ancillaries, is well ahead versus the same period last year,” Lundgren said.
Shares in easyJet rose about 4% in morning trading on the back of the upbeat outlook for bookings.
The airline also announced an order for more than 300 engines from CFM to power the additional 157 Airbus aircraft it has bought.
While easyJet has always used the Franco-American engine supplier, Lundgren said that with many other Airbus customers depending on troubled rival Pratt & Whitney – and other airlines affected by Boeing’s production woes – “we are probably the only airline who is getting the deliveries that we set out to do, with 16 aircraft coming in this year”.
