Ryanair Plc saw its stock drop 4.7% on Thursday following a trading update from rival Easyjet Plc that highlighted mounting cost pressures and softer booking patterns ahead of the summer travel season.
Easyjet now expects a headline loss before tax of between A5540 million and A5560 million for the six-month period ended March 31, 2026. The carrier disclosed an extra A525 million in fuel costs incurred in March and recorded A530 million in net legal provisions over the reporting period.
The airline reported that headline cost per available seat kilometre - CASK - rose by 5% year-on-year in the first half of fiscal 2026. Fuel CASK moved in the opposite direction, decreasing by 5%. When fuel is excluded, Easyjet said headline CASK increased by 8% compared with the prior year. Management expects CASK excluding fuel to rise further in the second half, but only in the low single-digit range.
On demand, Easyjet described booking trends as softer heading into the peak summer months. For the third quarter of fiscal 2026, bookings were 63% sold, a decline of 2 percentage points versus the same period a year earlier; ticket yield for that quarter was described as marginally down. Fourth-quarter bookings were 30% sold, also down 2 percentage points year-on-year, while ticket yield for that quarter was modestly higher.
Easyjet said it has hedged 70% of its jet fuel requirements for the summer at a price of $706 per metric tonne. The company continues to expect customer growth in fiscal 2026 to be in the low double digits year-on-year.
The trading update underlined the cost pressures confronting European low-cost carriers and weighed on market sentiment across the sector. Because Ryanair competes directly with Easyjet on many European routes, investors reassessed earnings risk and demand assumptions for peers after the weaker trading indicators were disclosed, contributing to Ryanair B4s share price decline.
Context and market reaction
Easyjet B4s guidance on a headline loss, the disclosure of additional fuel costs and the posting of legal provisions formed the principal elements of the update. These items, together with the reported increases in CASK excluding fuel, framed a more constrained profit outlook for the first half of fiscal 2026 and prompted market re-evaluation of near-term results for companies operating in the same segment of the airline industry.
Investors will be watching subsequent updates from both Easyjet and its competitors for confirmation on whether the weaker booking trajectory and elevated non-fuel unit costs persist into the remainder of the fiscal year.