EasyJet quarterly profits tumble 70% in face of Middle East conflict

EasyJet suffered an almost £200 million year on year fall in third quarter profits to £85 million in the face of rising fuel prices and a slump in consumer demand following the start of the Iran war.

 

The 70% slump from a pre-tax profit of £268 million in the same period last year came as the UK budget airline faces a takeover bidding war between rival US investment firms Apollo and Castlelake.

 

European Union is reportedly preparing to review airline ownership rules that could be a block the preferred £5.7 billion takeover proposal by Apollo. The private equity giant has until August 7 to table a firm offer. However, there was no update on the bid from easyJet today.

 

In a trading update, the carrier said: “Financial performance in the third quarter of easyJet’s 2026 financial year was impacted by elevated fuel prices and a reduction in consumer demand following the onset of the Middle East conflict in March and consumer concern about unrealised fuel supply issues.

 

“Strong demand for late bookings in the month of departure was seen throughout the quarter, however this was insufficient to fully offset the weaker booking trends experienced following the conflict.”

 

Passenger carryings were down marginally to 25.7million in the quarter with the load factor reduced by 1.3 percentage points to 88.9%.

 

The pre-tax profit at package holiday arm easyJet holidays came in at £84 million, down by £2 million over the equivalent three months last year.

 

“Excluding foreign exchange movements, profit increased by 7%, demonstrating the resilience of its capital-light business model,” the company said. 

 

“Customer numbers continued to grow, increasing by 8% as the business gained market share in a competitive environment.”

 

EasyJet holidays customers are expected to grow by “low double digits” in the current financial year, “taking market share” from a base of 3.1 million customers. The operator is currently 87% sold for the summer peak quarter.

 

The airline is currently 68% sold for the fourth quarter, down two percentage points year on year, However, the position has improved by a singe percentage pojnt since half year results in May.

 

This was attributed to continuing “strong late bookings”. Meanwhile, bookings beyond the month of departure are also beginning to improve, “albeit still needing some price stimulation”.

 

EasyJet said that the final outcome for full year “remains dependent on the important remaining bookings, as well as fuel prices, which continue to be volatile”.

 

Meanwhile, senior management changes were disclosed with chief operating officer David Morgan retiring from the role to return to flying as an easyJet pilot. 

 

Chief commercial officer Sophie Dekkers will succeed Morgan in the operations position, bringing nearly 20 years of experience at easyJet. 

 

She will oversee the next phase of operational development, “driving productivity improvements while continuing to build on our strengthened operational performance and customer satisfaction levels,” the airline said.

 

Daniel Skjeldam, previously Hurtigruten chief executive and commercial head at Norwegian Air Shuttle, has been recruited as new chief commercial officer from September 1. 

 

“His appointment comes at an exciting time for the business as we prepare to launch our new loyalty proposition and focus on driving incremental revenue opportunities through premiumisation and business travel, alongside the continued growth and optimisation of our network,” easyJet said.

 

EasyJet chief executive Kenton Jarvis said: “We have continued to manage the impact of the Middle East conflict, and its effect on fuel prices and booking trends, during the quarter. 

 

“Pricing has been attractive, driving strong late booking demand for our flights and holidays and our relentless focus on execution has delivered an excellent operational performance and even greater levels of customer satisfaction.

 

“As consumer confidence increases, we are seeing the load factor gap close for peak summer and an extension of the booking curve as customers continue to prioritise travel and take advantage of our great fares.

 

“As we move into the busy summer period, we are looking forward to welcoming our customers onboard and I would also like to thank our fantastic colleagues for working hard to give our customers the best possible travel experience.”