British budget airline Easyjet said record fuel costs would erode its full-year profit if they did not fall soon, hitting its shares and those of other airlines.
Easyjet shares fell 12% in London today, while rival Ryanair dropped almost 8% in Dublin.
'First-half results will be in line with our expectations, however it is pretty obvious that if the recent significant rise in the fuel price is maintained then our second-half profits will be lower than we had previously expected,' said Easyjet CEO Andy Harrison.
The airline said the forward price for jet fuel this summer was over $1,000 a tonne, and at that level its fuel costs would rise by £45m sterling in the second half despite 40% of its fuel needs being hedged at $750 a tonne.
'It is unlikely that such a large and immediate fuel increase could be mitigated in the short term by revenue improvements and cost actions, therefore pretax profits for the full year would be below previous guidance,' the airline said.
Easyjet said that its relatively new fleet of aircraft, which consume less fuel than older fleets, and its low-cost business model would help it compete.
Its February load factor - a measure of how well it fills its planes - was up 1.8 percentage points versus the prior year to 84.8% and trading for Easter is on track. Around 27% of Easyjet's summer seats are sold which is slightly ahead of last year, it added.
