Easyjet shares drop seven per cent

Air traffic control strikes in France last month meant the airline had to cancel 600 flights.

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By :  ,  Financial Analyst

Following disruption in April due to air traffic control strikes in France, shares in Easyjet have fallen seven per cent. 

The company said that the disruption led to the cancellation of 600 flights and would mean £25 million cut on its pre-tax profits.

April's strike disruption wasn't the only factor that could bring down future revenue figures - the change in timing for the Easter holiday may have an impact. Chief executive at Easyjet, Carolyn McCall also warned that currency movements would "go against [the company] in the second half".

First six-months profit

In the six months to March 31st, Easyjet reported a profit of £7 million, compared with losses of £53 million last year. The BBC reports that the profits were bolstered by low fuel prices and a strong finish to the ski season.

In an industry where losses are generally made in the winter and profits earned in the summer, Easyjet's half-year profit was at the upper end of forecasts – the prediction had ranged from £5 million in losses to £10 million in profits.

Total revenue per seat rose by 0.2per cent to £54.91, and costs per seat fell 1.4 per cent to £38.66. Revenues for the period rose 3.8 per cent to £1.767 billion.

Ms McCall explained: "The profit in the half reflects the delivery of our customer-focused revenue initiatives and a strong finish to the ski season, as well as the benefit we received from the lower fuel price and favourable foreign exchange movements.

She added that, forward bookings are in line with last year and passengers are benefiting from lower fares as competition increases and fuel costs remain low.

A good position

Ms McCall also said that the airline was "well positioned to grow revenue and profit this year".

She explained that the company was seeing a good level of customer loyalty. "There is an element here for repeat customers, so 58 per cent of customers are rebooking and 62 per cent of business passengers are rebooking."

Easyjet predicts that the market for European short-haul flights will continue to grow, thanks to the improved economy and lower oil prices.

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