EasyJet posted a wider first-half loss as expected and saw its shares fell after it warned high fuel bills would erode profits this year.
The low-cost carrier said airfares were flat even though competition was intensifying and non-ticket revenues were on the rise, but analysts said its cautious outlook today signalled a recovery may be further away than expected.
EasyJet posted a pretax loss before goodwill of £22 million (€32 million) for the six months to the end of March, compared with a loss of £19 million previously.
The result was in line with expectations but easyJet shares were 4.9 per cent weaker at 235p this morning.
The carrier said its fuel costs rose from £65.4 million to £98.6 million in the period, although favourable exchange rates reduced the net cost increase to £18 million.
EasyJet has been reducing staff, improving productivity and increasing fleet utilisation.
The carrier has 50 per cent of its fuel costs hedged until June 2005 when the level falls to 10 per cent.
US crude oil prices hit a record high of $58.28 a barrel in early April.