EasyJet reported a sharp decline in profits for the three months ending June 30, 2026, as rising fuel costs and softer demand weighed heavily on its financial performance. The budget airline posted pre-tax profits of £85 million, down 70% from £286 million in the same period last year. Group revenue increased slightly by 2% to £2.98 billion, while passenger numbers remained broadly flat at 25.8 million.

The surge in fuel expenses was a significant factor in the profit drop, with costs rising by 17% to £732 million, including a £105 million increase attributed to geopolitical tensions in the Middle East. The conflict has driven up oil prices, impacting airlines globally. Despite the rise in fuel costs, EasyJet struggled to raise fares as demand remained weak, particularly from holiday travelers. The company noted that the traditional booking window remained shorter than usual, with many customers purchasing tickets within four weeks of departure.

EasyJet’s financial challenges follow on from a difficult winter, during which the airline recorded losses of £552 million. At the nine-month stage of its financial year, cumulative losses reached £467 million, marking the company’s worst performance since the COVID-19 pandemic.

The airline, which aims to become a £1 billion annual profit business by the end of the decade, faces significant hurdles in meeting this target. Chief Executive Kenton Jarvis, in his role for the past 18 months, acknowledged that load factors remained below expectations. He indicated that price reductions, or “price stimulation,” might be necessary to attract passengers and boost sales, particularly in its package holiday division.

EasyJet’s package holiday business showed relatively better results, generating £84 million in profits during the quarter. This segment benefits from higher margins and the ability to utilize aircraft at less popular times. In contrast, the airline’s core point-to-point flying operation earned just £1 million in the same period.

The financial pressures come amid an ongoing takeover contest between two U.S.-backed private equity firms, Apollo and Castlelake, valuing EasyJet at approximately £5.5 billion. Apollo has made an indicative offer of £7.15 per share, with a formal bid deadline set for August 7. Both bidders have pledged to comply with European Union rules requiring that 51% of ownership remain with European nationals. However, the EU has signaled a strict interpretation of ownership and control regulations, scrutinizing the influence minority shareholders might exert, which could complicate the takeover process.

EasyJet’s share price fell significantly following these developments but later recovered modestly after the company’s results were announced and investors tempered their concerns.

Industry analysts note that the challenges facing EasyJet reflect broader trends affecting the aviation sector in Europe. Fuel price volatility, increased travel friction due to post-Brexit border controls and new biometric systems, as well as changing consumer behavior influenced by geopolitical uncertainty and extreme weather patterns, are all contributing to subdued demand. Additionally, rising living costs may be curbing discretionary spending on holidays, further pressuring airline revenues.

The contrast between EasyJet and other low-cost operators, such as Ryanair, points to differences in business models. While Ryanair focuses strictly on ultra-low-cost point-to-point flying, EasyJet’s expansion into package holidays positions it closer to companies like Jet2, with varying margins and operational dynamics.

Looking ahead, EasyJet’s management has not provided specific guidance for the traditionally busy summer quarter or the full financial year, reflecting uncertainty about how market conditions and competitive pressures will evolve in the coming months.