EasyJet Warns of Widening £560 Million Loss as Middle East Conflict Drives Fuel Costs

EasyJet warned on Thursday of a headline pre-tax loss of between £540 million and £560 million for the first half of its financial year ending March 31, 2026, a significant deterioration from the £394 million loss recorded in the same period a year earlier. The British low-cost carrier attributed the worsening performance primarily to the ongoing US-Israel war on Iran, which has driven jet fuel prices as high as $200 per barrel in recent weeks. The conflict added £25 million in fuel costs in March 2026 alone, while a separate £30 million net increase in legal provisions related to historic cases compounded the financial pressure. Shares in easyJet fell as much as 9% in early trading on the London Stock Exchange before settling approximately 3% lower by mid-morning.

£560m (GBP) — easyJet's maximum projected first-half pre-tax loss

easyJet first-half headline pre-tax loss: Loss (H1 2024-25) (before: £394 million, after: £540–£560 million (H1 2025-26))

Fuel hedging covers 70%, but unhedged costs bite EasyJet chief executive Kenton Jarvis, who took over the role in January 2025, said the airline had hedged 70% of its fuel needs for the remainder of the financial year through to September to limit exposure to price swings. The unhedged portion, however, remains acutely vulnerable: the airline noted that each $100 movement in the spot price of jet fuel per metric tonne adds approximately £40 million in costs, and the current price sits roughly $800 higher than before the conflict began. Jarvis said fuel supplies remained normal and dismissed suggestions that flights might need to be cancelled later in the summer as speculation. „We have visibility to the middle of May and have no concerns.” — Kenton Jarvis via The Independent He acknowledged a broader shift in passenger behaviour, describing a "general shortening of the booking window as people wait till close to the point of departure to book." Bookings for the third quarter are running two percentage points below the same point a year ago, with 63% of seats sold for that period compared to 65% previously, according to Handelsblatt. Despite the headwinds, Jarvis pointed to the airline's busiest-ever Easter holiday period and said the ramp-up into peak summer was proceeding as planned.

£4.7bn (GBP) — easyJet total liquidity buffer cited by CEO

Ryanair's O'Leary raises supply disruption alarm for Europe Michael O'Leary, chief executive of rival Ryanair, issued a broader warning about the sector's exposure to the conflict. Speaking on Sky News at the start of April, O'Leary cautioned that if the war continued and the Strait of Hormuz remained closed, European airlines could face fuel supply disruptions in May and June. Jarvis pushed back against that framing, saying easyJet saw no supply concerns through mid-May. The airline also reported that demand for destinations such as Cyprus, Turkey and Egypt had initially dropped following an Iranian attack on the UK's Akrotiri base in Cyprus, but had since partially recovered. Jarvis noted a modest shift in passenger preference away from the eastern Mediterranean toward the western Mediterranean, where demand remains comparatively strong. He added that domestic routes were also holding up well.

The US-Israel military campaign against Iran, known as Operation Epic Fury, began on February 28, 2026, and resulted in the death of Ali Khamenei in the initial strikes. The conflict triggered immediate disruptions to global aviation, including airspace closures and Iran's stranglehold on tanker traffic through the Strait of Hormuz, which caused oil and jet fuel prices to surge sharply. EasyJet, headquartered at London Luton Airport, typically records losses in the first half of its financial year — the winter period — and relies on the summer season to generate the bulk of its annual profit.

Full results due May 16 as airline eyes summer recovery EasyJet is scheduled to release its full first-half financial results on May 16, 2026. The airline's load factor — the share of seats filled — rose by 2 percentage points to 90% during the October 2025 to March 2026 period, a sign that passenger volumes held up even as financial performance deteriorated. Jarvis said the airline's investment-grade balance sheet and £4.7 billion in liquidity left it well positioned to absorb near-term geopolitical shocks while maintaining focus on medium-term targets. „Despite these positives, our H1 financial performance worsened year on year, impacted by the conflict in the Middle East and the competitive environment in some markets.” — Kenton Jarvis via The Wall Street Journal The airline declined to provide details on the historic legal cases that generated the £30 million increase in provisions. Jarvis warned that if fuel costs remained elevated for a sustained period, rising ticket prices across the industry would be an inevitable consequence.