Budget airline EasyJet has warned that escalating conflict in the Middle East drove an extra £25 million in fuel costs during March alone, contributing to a significantly wider-than-expected first-half loss and sending its shares sharply lower.
In a trading update for the six months ended March 31, 2026, the airline said it now expects a headline pre-tax loss of between £540 million and £560 million. That compares with a £394 million loss in the same period a year earlier.
The £25 million hit stemmed from higher jet fuel prices triggered by the conflict, which forced EasyJet to purchase 18% of its March fuel requirements at elevated spot prices after its hedges ran out.
Fuel costs per available seat kilometre (CASK) still fell 5% year-on-year for the half overall, but the March spike highlighted the airline’s vulnerability to geopolitical shocks in energy markets.
Demand softness adds to the pressure
Beyond the direct fuel cost, the conflict created “near-term uncertainty” around customer demand, particularly for routes serving Egypt, Turkey, and Cyprus.
EasyJet noted a shortening of the booking curve and reduced forward visibility in those markets, though it stressed that overall demand remained positive.
Load factor for the half rose 2 percentage points to 90%, and easyJet holidays saw customer numbers jump 22%. Second-quarter revenue per available seat kilometre (RASK) increased 3%, helped by strong domestic, city, and Western Mediterranean routes, as well as an earlier Easter holiday period.
However, the airline also absorbed a £30 million net increase in legal provisions related to historic cases, pushing headline costs higher.
Operational resilience amid challenges
Despite the headwinds, EasyJet highlighted improvements in service quality. On-time performance reached 78% (up 1 point), while customer satisfaction scores rose to 84% for the airline and 85% for its holidays business.
“easyJet saw continued positive demand in the first half, driven by our great value flights and holidays, alongside a continued focus on our operations and customer experience,” said CEO Kenton Jarvis.
“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.”
Jarvis added that the company’s investment-grade balance sheet and £4.7 billion in liquidity position it well to weather the challenges while pursuing medium-term targets.
Fuel volatility and summer bookings
For the full year, EasyJet expects low double-digit customer growth amid a competitive landscape. Summer bookings are running slightly behind last year: Q3 is 63% sold (down 2 points) with marginally lower ticket yields, while Q4 is 30% sold with modestly higher yields.
The airline is 70% hedged for the second half of FY26 at $706 per metric tonne, but with spot prices around $1,500 as of mid-April, any further escalation could prove costly. Every $100 movement in fuel prices equates to roughly £40 million of impact in H2.
Airline headline CASK ex-fuel is expected to rise in low single digits in the second half, compared with 8% in the first half. EasyJet said it remains on track with prior estimates here, though total costs will depend heavily on fuel price volatility.
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