easyJet (LON:EZJ) shares tumbled 8% on Thursday morning after the airline reported a solid third-quarter profit increase but warned of headwinds from strike-related costs.
Headline pretax profit rose 21% year-on-year to £286 million in the three months to 30 June, up from £236 million a year earlier. Revenue climbed 11% to £2.92 billion, fuelled by strong demand for travel through primary airports and the timing boost from Easter, which fell in April this year.
The Holidays segment stood out, with revenue surging 27% to £428 million. Pretax profit from the Holidays business climbed to £86 million, an increase of £13 million compared to last year. easyJet said it expects Holidays to deliver over £235 million in profit for the full year ending 30 September, with 85% of fourth-quarter capacity already sold. The airline plans to set new medium-term growth targets for the division later this year.
Passenger revenue increased by 9.7% to £1.76 billion, while ancillary revenue rose 5.6% to £732 million.
Despite the healthy operational performance, easyJet flagged recent disruptions due to French air traffic control strikes, which inflicted £15 million in unexpected costs, alongside £10 million in extra fuel expenses.
“The outlook for the full year remains positive with good profit growth expected,” easyJet said, “but late summer bookings and yields will be decisive.”
CEO Kenton Jarvis criticised the impact of French ATC strikes, calling them “unacceptable challenges” for both passengers and airline crews.
easyJet’s cash balance stood at £803 million at the end of June, up sharply from £456 million a year earlier.
The company will update on its Holidays growth strategy later this year and report full-year results after September.