The airline easyJet has said its summer holiday bookings are lagging behind last year’s, as the Middle East conflict weighs on consumer confidence and passengers appear to be waiting later to book trips.
The budget carrier said it had to spend an unexpected extra £25m on jet fuel in March after the start of the US-Israel war on Iran.
However, easyJet said it was not experiencing any disruption to fuel supplies, adding that it had its usual visibility of supplies over a rolling four-week period. It said it did not expect to cancel any further flights this summer despite the warning from Ryanair’s Michael O’Leary in April that the UK was the most vulnerable country in Europe to potential jet fuel shortages should the strait of Hormuz remain closed.
EasyJet said customers should “book with confidence” amid signs that worries over fuel shortages and resulting flight cancellations were discouraging travellers, echoing comments from rivals including Ryanair.
Kenton Jarvis, easyJet’s chief executive, said airlines were able to source jet fuel from a range of different countries: “Fuel supplies are diversifying, we are seeing more production in the Americas and Norway.”
The airline said customers were still reluctant to book far ahead of time, with many waiting until the month of departure to commit to travelling.
“We continue to see positive late bookings since the conflict began; however, overall bookings for the summer period are behind where they were at this point last year,” it said.
Jarvis said the pledge to honour prices and keep flying was important to reassure customers after some European airlines added surcharges. He said easyJet had no intention of cutting summer flights, despite contingency powers being granted by the UK government to enable airlines to save fuel.
That flexibility to cancel “could be useful in the winter” if fuel prices remained high, Jarvis said, but added: “We make more than all our profit in 12 [summer] weeks. And therefore there’s nothing that we fly in July, August or September that wouldn’t be contributing positively towards the fixed overheads. If the fuel’s there, we will fly it.”
The company has hedged 72% of its fuel needs for the next six months, covering the busy summer period up to the end of September. However, Jarvis said: “We’ve suspended hedging in the short term because [the oil price is] so volatile that it fell 6% yesterday. It bumps up and down depending on what [Donald] Trump has for breakfast.
“Who knows how long this takes, to really open up the strait. While the supply risk is fading, it’s not coming through in price because you’re paying for this diversification.”
Meanwhile, easyJet reported a £552m pre-tax loss for the six months to 31 March, compared with a loss of £394m in the same period a year earlier.
EasyJet said it had raised its minimum ticket fare in response to higher fuel costs and was reviewing all of its discretionary costs.
Jarvis said the airline was able to cope with the current situation. “Despite conflict in the Middle East creating near‑term uncertainty, easyJet is well placed to manage the current environment, supported by one of the strongest investment‑grade balance sheets in European aviation,” he said.
The airline said it had reviewed its summer flight schedule in March after the outbreak of the conflict, resulting in a 0.3% net reduction in seats for the period. However, it now intends to operate its full summer schedule as planned.
Jarvis called on European airports to use the “flexibility” given to them by the European Commission to help passengers avoid long border queues over the busy travel period around the bank holiday weekend and school half-term break in parts of the UK.
Some travellers have faced lengthy delays at border checks as a result of the EU entry-exit system (EES) that came into effect in early April.
“It is really inexcusable,” Jarvis said. “I’d encourage border forces and the member states in Europe to use the flexibility that the EC [European Commission] has given them. They don’t need to leave people in long queues. They can just stop using the gates or parallel run using the regular passport stamping procedure.”
Passengers should also arrive at the airport in good time, he added.
Despite fuel and EES concerns, Jarvis said: “What is great is once you’ve got through the airport, the skies are operating very well at the moment. We’ve seen really good punctuality, and the French [air traffic controllers] haven’t gone on strike, which is kind of unusual.”
