Business

EasyJet to sue over French air strikes

Easyjet planes Image copyright PA

EasyJet will complain to the European Commission about strikes by French air traffic controllers, which have caused thousands of flights to be cancelled.

The industrial action has cost the airline £25m and resulted in more than 2,600 flights being cancelled in the three months to 30 June.

Chief executive Johan Lundgren argued EU law was being breached by failing to protect flights over France.

A failure to take action was breaching citizens' freedom of movement, he said.

EasyJet's plan to file a legal challenge next week comes after a similar move by Ryanair and IAG, which owns British Airways, to jointly complain to the Commission over its lack of action on the strikes.

The airline said costs for the full year would rise about 3% due to the disruption, which has so far been greater than during the whole of 2017.

Mr Lundgrun said: "It's been a challenging year so far and we estimate that this will not go away."

Optimistic outlook

EasyJet also warned that the long spell of hot weather in the UK and the World Cup could also affect demand for late bookings in the three months to 30 September.

However, the airline raised its full-year profit outlook to between £550m and £590m despite the impact of the strikes due to strong demand for seats.

It had previously estimated annual profits of between £530m and £580m.

Image copyright Getty Images
Image caption EasyJet chief executive Johan Lundgren says it has been a challenging year for the airline

Revenue for the third quarter rose 14% to £1.6bn, with revenues from baggage and seat allocation up more than a fifth to £328m.

The airline flew 24.4 million passengers - 9.3% more than the same period last year in the three months to 30 June.

Shares in EasyJet rose almost 3% to £17 in morning trading in London.

Richard Hunter at Interactive Investor, said the higher profit guidance should increase the dividend for shareholders.

He added: "Costs in general need to be tightly controlled in a notoriously cyclical industry, and easyJet will have its work cut out in keeping the lid on costs within its control in the event of a future downturn."

George Salmon at Hargreaves Lansdown said EasyJet was starting to benefit from self-help measures such as the "dramatic increase", but warned: "Operating costs and start-up losses from the recently acquired Air Berlin services are both higher than expected."

Losses at Berlin Tegel airport, where EasyJet has expanded rapidly after buying parts of Air Berlin following its collapse, will rise to £125m this year - £30m higher than its previous estimate.

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