by
359Rabbit
@ 2008-05-07 - 09:22:02
Is the age of cheap air travel coming to an end? Budget airline Easyjet has revealed that for the first six months to 31 March the firm made a loss of £57.5m.
Although passenger numbers have increased by 15% to 18.9million and has revenue increased by 24% to £892m over the same period. It said that fuel costs from April to September are set to increase by at least £45m pounds.
The price of jet fuel has risen 35% over the last three months and is now 80% higher than last year, said the airline's chief executive Andy Harrison.
However, he said this would impact more on competitors than Easyjet.
"Nobody knows how much of this increase is driven by short-term financial speculation and how much is a longer term sustainable increase," he added.
"What is certain is that if these fuel increases are maintained many of our weaker competitors will disappear or downsize and Easyjet will emerge even stronger reflecting the combination of our business model, our cost advantage, our new fuel efficient fleet and the strength of our network."
I find his statement hard to understand, how long can a compnay remain viable when it makes a loss of £57million, last year it made a loss of £17.1 million doesn't seem good business to me.
It is said that BAA is set to increase costs at Stansted Airport although Easyjest and rivals Ryanair are fighting this in the courts. If the rise goes ahead then this will further hurt the cheap air travel industry.
Which for the environment maybe not be a bad thing.