EasyJet blames profit woes on weather and fuel costs

by Ella FAIRCHILD on January 21, 2011

EasyJet reported this week that its profit margins would reflect double the losses that analysts had predicted.

As the carrier struggles with freezing weather, union walkouts and rising fuel costs, the group said that it would lose nearly £31m this round. As the news emerged, shares for the budget airline fell 16.2 per cent.

Majority shareholder, Sir Stelios Haji-Joannou said, however, that he believes the airline cannot simply blame its woes on bad weather and industrial action. As th airline’s largest investor, Haji-Joannou states the carrier is too sudden to point the finger at weather and rising fuel prices.

The airline said last week that profits would fall amidst weak demand and add-on charges applying. Furthermore, the carrier has been struggling with union walkouts in both France and Spain.

Yet, industry analysts say it is typical for European carriers to struggle more in the winter months. With cancellations and airport closures from bad weather, it is not uncommon. Furthermore, some analysts say that easyJet’s profit warnings could be more than just freak weather and ongoing industrial rows.

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