EasyJet reports demand strong for low cost flights

Analysts are saying that EasyJet – and many other airline companies – cannot operate profitably if oil prices remain at their current levels.

EasyJet, however, is reporting that the decline in consumer appetite for longer-haul flights hasn’t hit the weekend break and holiday market on low-cost carriers. In fact, the airline said it experienced a strong demand for budget flights in June.

EasyJet ranks as the second-largest no-frills carrier in Europe, with 38 million passengers in 2007. The carrier announced an increase in passengers of 19.5% in June. Much of that increase, however, is due to a growth in fleet size and acquiring GB Airways.

The airline’s passenger load factor, or percentage of seats sold to those available, is showing continued strength on short-haul flights. Last month’s load factor was up slightly over last year, at 86.9%.

This reported demand strength is one of the only positive factors in an industry facing unprecedented operating cost levels due to oil prices that have risen to more than $140 a barrel – which are threatening to drive the entire industry into a £3 billion this year.

EasyJet and its rival low-cost carrier Ryanair are two of the most profitable airlines in the world, but they will not be able to sustain profits if oil prices remain at current levels, according to analyst predictions. The director of communications for EasyJet, Toby Nicol, has reported that fuel costs have doubled from £10 per passenger in 2007 to £20 today.

www.easyjet.com