easyJet warns of deepening first half loss; stocks tumble 16%, worst since 2004

easyJet warned that first half losses may double in 2011 to between GBP140 million and GBP160 million, compared to a pre-tax loss of GBP78.9 in the previous corresponding period. Reasons include increasing fuel costs, an uncertain economic outlook and the impact of poor weather. easyJet however stated it remains “on track to be profitable again this year” adding that it has posted a first-half pretax loss for the last eight reporting periods while recovering to record a full-year profit. [1288 words]

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This report contains the following subheadings:

• Bad weather, rising fuel costs, weakening ancillaries and ATC strikes causing problems
• New charges possible for baggage as ancillaries/seat decline
• Unit revenues in 2H to remain ‘robust’; full year expectations remain ‘broadly unchanged’
• Diversifying network and improving presence in key business hubs
• Capacity growth continues focus on mainland Europe

This report contains the following charts and tables:

• easyJet share price growth: Jan-2010 to Jan-2011
• easyJet financial highlights for three months ended Dec-2010
• easyJet ancillary revenue as a proportion of total revenue: 2006 to 1QFY2011
• easyJet hedging plans
• easyJet revenue growth and passenger numbers growth: 2004 to 1QFY2010
• easyJet fleet plan