Budget airline EasyJet has announced a steep 70% decline in its pre-tax profits for the three months ending 30 June 2026. The company reported profits of £85 million for the quarter, a significant drop from the £286 million recorded in the same period last year. This substantial reduction in profitability is largely attributed to a sharp increase in fuel expenses and a downturn in flight bookings, both of which have been heavily influenced by geopolitical events.
The airline highlighted that its fuel costs alone rose by £105 million during the quarter, a direct consequence of the escalating conflict in the Middle East, particularly the Iran war, which has driven global energy prices upwards. This surge in operational costs has severely squeezed EasyJet's margins, despite efforts to manage pricing. The airline also noted a slight decrease in passenger numbers, which fell by 0.4% to 25.8 million, alongside a lower load factor – a key metric indicating how full an airline’s planes are.
The announcement follows closely on the heels of a major corporate development for EasyJet. Just weeks ago, the airline reached an agreement in principle for a £5.7 billion takeover by US private equity firm Apollo, valuing the company at £7.15 per share. This deal saw Apollo outmanoeuvre a previous £5.5 billion offer from rival US investment firm Castlelake, which EasyJet had also provisionally accepted days earlier. The current profit figures underscore the challenges facing the airline industry, even as it navigates significant ownership changes.
EasyJet's chief executive, Kenton Jarvis, acknowledged the ongoing impact of the Middle East conflict on both fuel prices and booking trends. He noted that while late bookings have shown strength, particularly for the summer season, this has not fully compensated for the earlier weaker demand. The airline observed passengers increasingly booking closer to their departure dates, with bookings beyond the immediate month of travel beginning to improve, although some price stimulation is still required to attract customers.
The company cautioned that the full-year financial outcome remains uncertain, heavily dependent on the volume of remaining bookings for the critical summer period and the continued volatility of global fuel prices. The airline industry, particularly budget carriers like EasyJet, is highly sensitive to external shocks such as geopolitical conflicts and energy market fluctuations, which directly impact both operational costs and consumer confidence in travel.