easyJet plunges after fuel hike

Marion Dakers
BUDGET airline easyJet saw its shares plummet yesterday after it posted a disappointing quarterly update due to soaring fuel prices and lower revenue per seat.

easyJet shares fell 16.2 per cent to 382p, after chief executive Carolyn McCall (pictured) warned that the higher market price of fuel will put pressure on margins again this year.

The company also expects revenue per seat to continue dropping in the next six months, due to fewer forward bookings during the icy weather and fewer than expected passengers paying to check in their luggage.

The company expects a loss of £140m to £160m in the next six months, compared to a pre-tax loss of £78.7m in the same period last year.

Total revenue in the three months to 31 December rose 7.5 per cent to £654m, though strikes and disruption caused by the weather cost £6m and £18m respectively.

McCall announced a new range of flexible fares for business travellers in November, and the firm said yesterday that initial take-up has been encouraging.

Wyn Ellis, Numis Securities analyst, yesterday cut his forecasts for the year and warned that fuel rises would cost the firm £30m to £35m in the next half.