British low-cost airline group easyJet has suffered a loss of £126 million ($160 million) before tax for Q1 2024. Despite the carrier reporting that performance and booking trends remain strong, profits were affected by the ongoing Israel-Hamas conflict.
Tensions exploded on October 7, 2023 after conflict escalated in the Gaza Strip. easyJet initially suspended flights to Israel and Jordan, although the latter services have since been reinstated. However, the airline reported that the impact of pausing these flights cost the company £40 million ($51 million). The conflict has also led to a slowdown in flight bookings across the wider aviation industry, with easyJet's load factor dropping from 87% in Q1 FY23 to 86% in Q1 FY24.
easyJet's seasonal winter loss for the first half of 2024 is expected to improve year-on-year despite the conflict in the Middle East. This improvement comes as a result of disciplined capacity growth where demand is strongest, alongside productivity benefits. easyJet expects cost per seat excluding fuel to remain broadly flat in the first half of 2024, with fuel costs 7% higher.
"We delivered an improved performance in the quarter which is testament to the strength of demand for our brand and network," said easyJet CEO Johan Lundgren.
easyJet's financial performance in the first quarter of 2024 showed year-on-year improvement at a headline level, with underlying progress stronger still. Demand and bookings have recovered strongly from late November. easyJet holidays had another strong quarter, with customer numbers increasing by 48% compared to the same period last year, and a profit of £30 million representing a 131% increase year-on-year.
Lundgren added: "we see positive booking momentum for summer 2024 with travel remaining a priority for consumers. Flight and holidays bookings took off strongly during the traditional busy turn of year sales period, as customers opted to secure their summer holidays to firm favourites like Spain and Portugal alongside destinations further afield like Greece and Turkey."
Although still early, bookings for summer 2024 are building well, with the turn of the year bookings period showing an increase in both volume and pricing compared to the same period last year. Demand for easyJet’s primary airport network remains strong, with RPS for the second half of FY24 currently well ahead year-on-year. This positive momentum is also evident in the holidays business, where it continue to expect customer growth to exceed 35% year-on-year.