EasyJet profit drops as Middle East conflict weighs on travel demand
Rising geopolitical tensions are pressuring European budget airlines during a critical booking period for summer travel. EasyJet says quarterly profit falls sharply in the three months to June, even as forward bookings for its fourth quarter point to resilient demand.
Highlights
- EasyJet's headline profit before tax for Q2 dropped to £85 million from £286 million last year due to increased costs and weaker consumer confidence linked to Middle East conflict.
- EasyJet shares fell up to 14 per cent on Wednesday amid uncertainty over a £5.7 billion Apollo takeover deal, triggered by concerns about a potential EU airline ownership rules review.
- Ryanair's profit after tax for Q2 decreased 34 per cent to €538 million, underperforming analyst expectations and mirroring sector-wide earnings pressure.
Quarterly earnings and booking trends
As reported by Financial Times, EasyJet says headline profit before tax for the three months to June is £85 million, down from £286 million in the same period last year, as the war in the Middle East raises costs and weakens consumer confidence.The Luton-headquartered carrier says demand remains strong heading into the peak summer season. It has sold 68 per cent of its airline capacity for the three months to September, its fourth quarter, and reports a rebound in consumer confidence.
Chief executive Kenton Jarvis says passengers are beginning to book further in advance, adding that customers continue to prioritise travel and take advantage of the airline's fares.
Takeover uncertainty and wider sector pressure
Investor concerns also focus on EasyJet's planned takeover move. Shares fell as much as 14 per cent on Wednesday after reports of a looming EU review of airline ownership rules raised doubts over the transaction.The carrier's board this month recommends a £5.7 billion offer from Apollo, exceeding a £5.5 billion bid from U.S. private credit group Castlelake. The proposed deal adds another layer of scrutiny at a time when earnings across the low-cost airline sector are already under pressure from regional conflict and softer consumer sentiment.
Ryanair reports a similar impact earlier this week. The Dublin-based airline says profit after tax for the three months to June is €538 million, down 34 per cent from the same period in 2025 and below analysts' expectations of €579 million.
USD/NOK bearish momentum and oversold signals were the focus of our earlier analysis, with the pair trading below key moving averages and sellers retaining control. We noted that the outlook favored consolidation within a defined range, with risks skewed to further downside unless USD/NOK broke above the kr9.674 resistance level.
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