EasyJet takes £25m hit on extra fuel costs
Budget airline easyJet has said it had to spend an unexpected extra £25m on jet fuel in March, after the start the US and Israel’s war on Iran.
But chief executive Kenton Jarvis said this morning that there have been “no issues” with fuel supply and that people should not panic about their summer holidays.
Kenton Jarvis told BBC Radio 4’s Today programme:
We have seen absolutely no issues with fuel supply at any of our airports in the UK, across Europe, or indeed beyond.
We stay in very close contact with our fuel suppliers, airports, governments, and they are equally raising no issues looking forward. What is true is obviously there’s a lot less oil coming from the Gulf region, but fuel suppliers have successfully diversified, with production increased in Norway, in West Africa, in the Americas, and refining capacity for jet fuel has also increased substantially outside of the Gulf region.”
The company has hedged 72% of its fuel needs for the next six months, covering the busy summer period up to the end of September. However, it has temporarily suspended short-term hedging as a result of “elevated near-term fuel prices”.
The airline reported a a £552m pretax loss for the six months to 31 March, compared with a loss of £394m in the same period a year earlier. It normally makes its profit in the second half of the year, which includes the peak summer period.
Closer to home, the UK chancellor Rachel Reeves is expected to give a speech in parliament this morning, outlining her latest plans for cushioning the blow to consumers from an expected rise in inflation later this year.
It comes after Keir Starmer announced that the government will postpone the planned increases in fuel duty that were due to take effect in September and December, and give lorry drivers free vehicle tax.
Inflation fears are being fanned by conflict in the Middle East, which has triggered a spike in oil prices. Brent crude, the international benchmark for oil, is up 1.5% this morning to $106.61 a barrel.
Elsewhere in the world of tech, last night SpaceX unveiled its plans to list publicly on the US stock market.
Elon Musk’s rocket and satellite operations company is planning to go public on the Nasdaq exchange at a valuation of about $1.75tn, under the symbol SPCX, likely on 12 June. It is seeking up to $80bn in investment.
It said in its filing:
Our mission is to build the systems and technologies necessary to make life multiplanetary, to understand the true nature of the universe, and to extend the light of consciousness to the stars.
Introduction: Nvidia hits record quarter on AI chip boom
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
A fresh wave of AI optimism has lifted the stock market after chip designer Nvidia reported another set of record-breaking earnings last night.
The company, which designs chips critical for AI tech, reported an 85% year-on-year rise in revenue to $81.6bn in the three months ended in April, marking the 15th consecutive quarter of beating Wall Street estimates.
Nvidia forecast $91bn in sales for its current quarter, well above average investor expectations of $86bn, but short of the highest estimates. Its shares are down 1% in after hours trading, reflecting some worries among investors about how long the company can keep up its incredible growth trajectory.
Still, the revenue beat has lifted the mood in Asian stock markets: the South Korean Kospi has staged a dramatic 9% rise, while Taiwanese shares have risen by 3.3%, snapping a four-day losing streak. LG Electronics and Hyundai Mobis both rose by more than 20% after Nvidia boss Jensen Huang said that physical AI and robotics was the “second category” for major growth.
Elsewhere this morning, Wes Streeting, the former health secretary, has called for a “wealth tax that works”.
Speaking to the BBC, he proposed equalising capital gains tax with income tax, which he said could raise £12bn a year.
Streeting suggested that CGT rates should mirror the three bands of income tax of 20%, 40% and 45%, according to the BBC. He told the broadcaster’s Political Thinking podcast that loopholes should also be closed that allow people to disguise income from work as capital gains, and that lower rates of capital gains tax could be offered to entrepreneurs who are building companies.
His comments come after his resignation as health secretary last week, after several Labour MPs urged prime minister Keir Starmer to step down.
The agenda
9am BST: Eurozone flash PMI
9.30am BST: UK flash PMI
11.30am BST: UK chancellor Rachel Reeves expected to detail measures on cost of living support
1.30pm BST: US jobless claims
3pm BST: Eurozone consumer confidence reading
4pm BST: Bank of England governor Andrew Bailey speech at Cutler’s Feast, Sheffield
Updated
