By Pushkala Aripaka and Joanna Plucinska (Reuters) -EasyJet warned on Thursday that a strike by French air traffic controllers earlier this month and rising fuel costs would hit its annual profit,
EasyJet Faces Profit Decline Due to French Air Traffic Strike
By Pushkala Aripaka and Joanna Plucinska
(Reuters) -EasyJet warned on Thursday that a strike by French air traffic controllers earlier this month and rising fuel costs would hit its annual profit, sending the airline's shares down 8%.
The low-cost carrier said it still expects "good profit growth" for the year ending September, but forecast a hit of about 25 million pounds ($33.47 million) from the French strike on July 3 and 4, at the start of Europe's peak travel season, and higher fuel costs.
EasyJet reported pretax profit for the third quarter rose by about 50 million pounds to 286 million pounds, in line with expectations.
Its shares fell as much 8.1% to 483.3 pence by 0729 GMT and were the top loser on London's blue-chip FTSE 100 index.
"We are extremely unhappy with the strike action by the French ATC in early July, which as well as presenting unacceptable challenges for customers and crew also created unexpected and significant costs for all airlines," easyJet CEO Kenton Jarvis said in a statement.
Some analysts said they cut forecasts for the year based on Thursday's results.
While demand has remained strong for easyJet's budget-friendly flights and holiday packages, travellers overall are taking longer to book tickets amid worsening global macroeconomic sentiment, which the British-based airline said has continued.
Jarvis told reporters on a media call that the later booking trend "could have something to do with hot weather" because travellers are waiting to see how heatwaves, which have seen temperatures top 40 degrees Celsius in some parts of Europe, play out.
RESILIENCE
Still, European airlines have continued to report relatively solid results this year, with few signs that travel demand in the summer is substantially lagging last year.
Bernstein analyst Alex Irving said the results showed "another reassuringly surprise-free quarter" as easyJet has remained one of the more stable carriers compared to some of its European competitors like Wizz Air.
Jarvis also told reporters that worsening conflict in the Middle East had had a slight impact on services to destinations like Egypt and Turkey for a few weeks, but that demand has since recovered and the carrier had no plans to change routes as a result of the conflict.
Some airlines have cancelled flights to several Middle Eastern destinations, including major international hubs such as Dubai and Doha, and paused or shut operations in the region in the wake of escalating geopolitical tensions.
"With 67% of our airline's fourth-quarter capacity sold, the final outcome for FY25 will, as always, depend on late summer bookings and the associated yields," easyJet said in a statement.
The airline said it would issue new mid-term targets at the end of the year.
($1 = 0.7470 pounds)
(Editing by Subhranshu Sahu and Susan Fenton)
