EasyJet Claims Tough Times Are Ahead

The well known carrier, EasyJet, has just recently warned that there will be a tough winter ahead for the airline industry. This statement came just as the airline announced a 65 percent slump in its annual pretax profits. The carrier, which is based in Luton, cited a big fall in demand due to rising unemployment as the main cause for the slump.

EasyJet, which actually buys about two thirds of its fuel through hedging, ended up paying $951 per metric tonne of jet fuel when the market price was just $595. The fuel costs subsequently soared by £98.5 million. Of course, it was resilient sales that kept the airline in the red. Revenues rose 12.9 to £2.6 billion percent, saying that performance was extremely resilient during tough trading.

The carrier was able to fly 45.2 million passengers during the year. Bucking the trend of falling passenger numbers across the global industry by capitalizing on weak competitors in markets such as Spain and Italy. The airline was also able to confirm that it will expand by 7.5 percent annually until 2015, following a much publicized boardroom spat, which was sparked between the carrier’s founder Stelios Haji Ioannou’s concerns over expansion.

The airline said in a statement that Easyjet continued its strategy of carefully targeting growth in markets from which weaker competitors are retreating in this period of recession. Thus, EasyJet, is building a very strong market position that will ensure that the company is in position for profitable growth once the economy finally improves. Right now EasyJet is focusing on higher performing routes.