EasyJet warns of impact on French strike

EasyJet shares fell heavily after warned on Tuesday that disruption from French air traffic control strikes would weigh on its full-year profit despite the budget airline posting a record first-half performance.

Ms McCall, chief executive, highlighted that disruption in the third quarter is expected to hit pre-tax profit by £25m. She said this was expected to contribute to a fall in revenue per seat in the next quarter at constant currency of about 4 percentage points.

Shares in the airline fell 6.9 per cent to 1,706p.

Analysts said that a lacklustre start to summer trading, traditionally when airlines make most of their profit, would drag down consensus forecasts for full-year profit.

"Guidance of low-single-digit constant currency unit revenue declines would suggest some downside to our full-year profit before tax of £665m and certainly consensus £677m estimates," said Stephen Furlong, analyst at the broker Davy.

EasyJet is also facing a tougher outlook as its bigger rival Ryanair sharpens its competitive edge after an image overhaul and improvements to its network.

However, a lower fuel bill and favourable currency exchange movements helped easyJet to its best ever interim performance.

Europe's second-biggest budget airline made a pre-tax profit of £7m for the six months to the end of March, up from a loss of £53m the previous year. The last time it made a profit in its first half was in 2002.

Ms McCall said: "As we enter the important summer season forward bookings are in line with last year and as we predicted passengers are benefiting as fares fall to reflect a more competitive operating environment and lower fuel costs."

The fall in the price of fuel, which has dropped sharply since last summer, is set to cut easyJet's costs by between £95m and £120m for its full year to the end of September.

EasyJet's load factor, a measure of how full its aircraft are, rose 0.7 per cent to 89.7 per cent. Revenue per seat was up 2.6 per cent at constant currency.

Higher charges at airports in Germany and Italy and the costs of disruption pushed up its costs per seat, up 2.9 per cent, excluding account fuel and on a constant currency basis.

Revenue was £1,767m, up 3.8 per cent on last year, while basic earnings per share were 1.3p, up from a loss of 10.4p. The ordinary dividend per share was 45.4p, up from 33.5p.

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