Price of jet fuel 'literally doubled', reveals Easyjet CEO, but insists firm in a 'good position' ahead of summer holidays
Mr Jarvis said passengers should not panic about their summer holiday as EasyJet was “not seeing any disruption to fuel supply” and told customers to “book with confidence”
The EasyJet CEO has assured customers they can "book with confidence" despite revealing the firm's finances will be hit due to war in the Middle East, which is driving up fuel costs and creating "near-term uncertainty".
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The airline said last month that the conflict added about £25 million to its fuel bill in March alone.
Oil prices – which help determine the cost of jet fuel – jumped after disruption linked to Iran’s grip on tankers passing through the Strait of Hormuz.
Speaking to Nick Ferrari at Breakfast on LBC, EasyJet chief executive Kenton Jarvis said the price of jet fuel had “literally doubled”. He said it had risen from about $700 a metric tonne before the conflict to $1,400 afterwards.
But Mr Jarvis said passengers should not panic about their summer holidays. He said EasyJet was “not seeing any disruption to fuel supply” and told customers to “book with confidence”.
He said the airline had protected itself by buying most of its fuel in advance.
“The good news is we're well hedged. So we have bought 72 per cent of our summer requirements at the seven hundred dollar price,” he said.
“That puts us in a very good position. It protects EasyJet, but more importantly it protects our customers.”
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When the conflict began, EasyJet saw demand fall for eastern Mediterranean destinations including Turkey, Egypt and Cyprus, while more customers switched to the western Mediterranean.
Mr Jarvis said that pattern has now settled, with bookings recovering across the region helped by strong hotel deals in the east.
He also said ski holidays helped boost winter demand, with passenger numbers up 6 per cent even though airlines typically lose money during the winter season.
The CEO stressed that losses for the six months to 31 March were not unusual for the industry, because winter is traditionally a loss-making period for airlines.
The airline said it has sold 58 per cent of its seats for the six months to the end of September, down two percentage points from a year ago. But short-notice bookings in the month of departure are up year-on-year.
The group reported a half-year pre-tax loss of £552 million, which is in line with the range it gave in a trading update in April.
That is compared with a loss of £401 million a year ago.