easyJet loss widens to $740mn on fuel costs and Italy drag

easyJet reported a headline pre-tax loss of $740mn (552mn pounds) for the six months to 31 March 2026, a 40 per cent deterioration on the $528mn (394mn pounds) loss recorded in the same period a year earlier, as higher fuel costs, legal provisions and strategic investments in new Italian bases pushed costs sharply higher despite a 12 per cent rise in revenue.

Group revenue reached $5.3bn (3.95bn pounds), up 12 per cent year on year, with airline revenue rising 10 per cent to $4.6bn (3.44bn pounds). Passenger numbers grew 6 per cent to 42 million, with seat capacity up 4 per cent and load factor improving two percentage points to 90 per cent.

The headline earnings before interest and tax (EBIT) loss widened to $714mn (533mn pounds) from $495mn (369mn pounds) a year earlier. Headline cost per available seat kilometre rose 5 per cent year on year, with fuel costs increasing to $1.32bn (982mn pounds) from $1.27bn (949mn pounds) and non-fuel unit costs rising approximately 6 per cent, driven by inflation, foreign exchange headwinds and per-passenger airport charges that increased as load factors rose.

Three specific items distorted the underlying picture: the new Italian bases at Milan Linate and Rome Fiumicino dragged results by $40mn (30mn pounds) in their first winter season, on top of $27mn (20mn pounds) of losses in their inaugural summer, while a $43mn (32mn pounds) net increase in legal provisions and $27mn (20mn pounds) from the absence of prior year lease buyback gains added further pressure. Management said the Italian bases are expected to reach consistent returns over two years as routes mature.

The Iran conflict added a further $33mn (25mn pounds) in additional March fuel costs, prompting easyJet to reallocate approximately 400,000 seats away from Gulf-adjacent markets including Turkey, Cyprus and Egypt toward the Western Mediterranean, city flows and domestic routes. The airline also trimmed April and May capacity on thicker routes due to elevated fuel prices.

easyJet Holidays was the standout performer, posting a headline profit before tax of $82mn (61mn pounds), up 39 per cent year on year, with customer numbers rising 22 per cent and average selling price up 8 per cent to $835 (623 pounds). The division is on track to reach easyJet Holidays' own medium-term profit target ahead of schedule, supporting the group's overarching goal of more than $1.3bn (1bn pounds) in annual profit before tax.

The balance sheet is a genuine competitive strength. easyJet reported net cash of $582mn (434mn pounds) at the half-year and total liquidity of $6.3bn (4.7bn pounds), a position that allows the airline to absorb the current cost environment without the debt raises and guidance withdrawals affecting less well-capitalised competitors. Citi flagged that the result arrived broadly as flagged in April but noted that the full-year profit before tax outlook remained challenging, with consensus expected to shift from $344mn (257mn pounds) toward break-even or below.

Demand remains structurally solid, though oversupply on major beach routes, particularly London-Spain, has applied yield pressure as airlines displaced from Tel Aviv redeployed capacity into longer leisure routes. H2 is 58 per cent sold, two percentage points behind the prior year at the same stage, with Q3 at 79 per cent sold and Q4 at 40 per cent sold; late bookings in the month of departure continue to show year-on-year strength.

The shares rose 2.18 per cent to 354.5 pence following the announcement, a muted recovery for a stock that has lost approximately 33 per cent of its value year to date as fuel cost uncertainty has weighed on carriers broadly.