LONDON—Budget airline easyJet said Wednesday that its losses in the first half were nearly four times higher than a year ago as rising fuel costs outweighed a 24 percent jump in revenues.
The company reported a loss of 43.3 million pounds (US$85.4 million; euro55 million) in the six months ending March 31, compared with a loss of 12.7 million pounds in the same period a year earlier.
Revenue rose to 892.2 million pounds (US$1.76 billion; euro1.1 billion), including a 17 percent gain in passenger revenue to 751 million pounds (US$1.48 billion; euro955 million).
The airline's shares rose 1.8 percent to 302.75 pence (US$5.97; euro3.85) on the London Stock Exchange.
Andrew Fitchie, analyst at Collins Stewart, said it was time for investors to bail out of easyJet.
"We think '08 consensus earnings estimates of 33 (pence per share) for easyJet are vulnerable; we forecast 24 pence for the current year," Fitchie said in a research note.
"Consensus is only currently modeling the impact of increased fuel costs; a material economic slowdown is not being discounted and we believe this represents a further risk to the airlines and low cost carriers in particular," Fitchie added.
Keith Bowman, analyst at Hargreaves Lansdown Stockbrokers, said the outlook was difficult to call, "with the results coming a day after prospects for US$200 per barrel of oil being aired."
"Furthermore, there may also be an element of reluctance on the part of consumers to give up the luxury of travel, despite the deteriorating outlook, although whether this will last remains to be seen."
Bowman noted that shares had lost have their value in the past six months, so with "underlying trading remaining solid to date, market consensus opinion is currently favorable in tone."
Andy Harrison, the airline's chief executive, said easyJet was better placed than some of its competitors to weather the oil surge.
"Nobody knows how much of this increase is driven by short-term financial speculation and how much is a longer term sustainable increase. What is certain is that if these fuel increases are maintained many of our weaker competitors will disappear or downsize and easyJet will emerge even stronger, reflecting the combination of our business model, our cost advantage, our new fuel efficient fleet and the strength of our network," Harrison said.
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On the Net: http://www.easyjet.com/en/Investor/investorrelations--introduction.html
