EasyJet reported a 70 per cent year-on-year decline in third-quarter profit, as higher fuel costs and weaker demand linked to the Middle East conflict weighed on earnings.
The UK budget carrier on Thursday (23 July) said profit before tax for the quarter ended 30 June was £85 million, down from £286 million a year earlier, while its fuel bill rose by £105 million year-on-year.
The airline reported “strong demand” for late bookings in the month of departure throughout the quarter after lowering fares but said “this was insufficient to fully offset the weaker booking trends experienced following the conflict”.
Revenue per available seat kilometre (RASK) fell 3 per cent year-on-year in the quarter, while load factor declined by 1 percentage point to 88.9 per cent.
EasyJet said its final outcome for FY26 depends on fuel prices, which “continue to be volatile” as well as “the important remaining bookings”, with every 1 percentage point movement in Q4 RASK equating to approximately £33 million of revenue.
EasyJet is currently the subject of a potential bidding war, with US equity firms Apollo and Castlelake vying to take a major stake in the carrier. However, the European Union is reportedly preparing a review of airline ownership rules to prevent foreign investors from gaining effective control of carriers, according to Reuters – a move that could complicate a takeover of easyJet.
An EU official told Reuters that Apollo, Castlelake and easyJet had not discussed the details of their proposed deals with European regulators.
Leadership shake-up
In its Q3 earnings report, easyJet also announced the departure of chief operating officer David Morgan, who has chosen to retire from his current role and return to flying as an easyJet pilot.
Sophie Dekkers, currently chief commercial officer, will succeed Morgan as COO, while Daniel Skjeldam will join the airline from Scandinavian carrier Norwegian to take up the CCO role from 1 September.
EasyJet said Skjeldam’s appointment “comes at an exciting time for the business” as it prepares to launch a new loyalty programme, which CEO Kenton Jarvis first alluded to in May, focused on premiumisation and business travel.