Budget airline predicts turbulent winter ahead
Car drivers grumbling at price increases at the petrol pumps in recent weeks should spare a thought for airlines, whose rising fuel costs are wiping millions off their profits.
Budget airline easyJet this week blamed higher fuel prices for its 65 per cent drop in annual profit to £43.7 million to the end of September.
Its fuel costs during the last financial year rose £86 million, though the carrier says it expects price increases to have less of an impact next year due to the practice of hedging its fuel costs for the coming year.
In spite of the profits slide, easyJet claimed it was still the best performing European airline.
It carried three per cent more passengers last year, during which 45.2million people flew with the airline and its average load factor - the number of seats sold on each aircraft - rose 1.4 per cent to a healthy 85.5 per cent.
The airline said its position in European short-haul aviation strengthened with market share gains in London Gatwick as well as in Paris, Milan and Madrid and over a 10 per cent increase in take-off and landing slots at Europe's busiest airports.
Nevertheless, easyJet chief executive Andy Harrison said: ""We see a tough winter ahead. We are focussing our efforts on further cost savings and efficiency improvements together with optimising route profitability and aircraft allocation.""
He said easyJet would make a 'substantial profit improvement' in 2010, but passengers concerned about the financial security of any airline would be wise to buy Scheduled Airline Failure Insurance, which is available as a bolt-on to standard travel insurance policies.