Business News
Easyjet says rising fuel costs to hit profits and capacity
Jul 24, 2008, 11:53 GMT
London - British budget airline Easyjet warned Thursday that rising fuel costs would result in significantly lower annual profits which it hoped to offset by cutting flights over the winter months.
Easyjet said its annual fuel costs have increased by about 185 million pounds (370 million dollars), as analysts predicted that the company's full-year earnings would be less than expected.
It predicted that annual profits could be up to 42 per cent lower than in the previous financial year.
That would leave the airline with pretax profits of around 120 million pounds for the year to the end of September, compared with 191 million for the last year.
While Easyjet would attempt to offset more than 50 per cent of the additional fuel costs through revenues growth and cost savings, there would be a 12-per cent reduction in capacity from London's Stansted airport this winter.
Earlier this month, rival airline Ryanair said it would cut about 250 flights from Stansted this winter in an attempt to offset fuel costs.
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