LOW-COST airline easyJet has predicted record profits during its peak season despite cautioning over a “challenging” summer of airport strike action.

The Luton-based carrier said that based on current booking trends and a strong demand for holidays, it expects Q4 – July to September – to deliver another record pre-tax profit performance although it pointed to “very congested and inefficient” ATC (air traffic control) systems with the “whole industry seeing challenging conditions this summer”.

This confidence comes after the company saw a record headline pre-tax profit of £203 million for the three months to June 30, against losses of £114m a year ago after increasing its flight programme by 5% to 146,816.

Easyjet poised for take-off as consumers prioritise travel

It said its third quarter profit improved by £317m year on year, as demand for its network and services continued to be robust with its easyJet holidays division’ pre-tax profit of £49m driving the group towards a strong outcome for the full year.

While the Q3 results largely exceeded analysts’ expectations, easyJet’s reputation took a hit earlier this month when it cancelled 1,700 flights due to depart from Gatwick Airport in July, August and September, plunging British holidaymakers' plans into chaos. The decision is believed to have affected 180,000 passengers.

This flurry of cancellations has thrown up fresh concern about the resilience of squeezed European airspace to deal with high demand at a time when there are threats of more air traffic control strikes.

However, easyJet said that while more constrained air space and flow rate restrictions are resulting in “unprecedented ATC disruption as well as increased ATC strike days up 40% year to date vs 2019”, management had taken action to “mitigate the impact of this on our customers”.

The airline also received a boost after DHL workers at Gatwick Airport – who support easyJet operations – suspended their strike action in July and August after a breakthrough in talks over pay.

Scotland flights: Loganair accuses easyJet of risking routes

All the same, it remains to be seen how forgiving passengers will be given the airline cancelled flights last year too as it, like others, grappled with staff shortages after two years of pandemic-related turbulence and experienced air traffic control delays.

Johan Lundgren, the chief executive of easyJet, said: “Our Q3 performance has been underpinned by strong passenger demand for easyJet’s network and services. We continue to provide great value to customers with around half of easyJet’s fares currently on sale still under £50.

“We are absolutely focused on mitigating the impact of the challenging external environment on our customers and flying them on their well-earned holidays.”

Noting that the airline continued to see “good momentum as we move into Q4”, he added: “We will be operating over 160,000 flights and expect to deliver another record PBT performance. This winter we are adding more than 15% capacity and we see bookings ahead of the same period last year.”

During Q3, easyJet flew 26.2 million seats, a 5% increase on the same period last year when it flew 24.9 million seats. Load factor was 90% compared with 88% the same time last year, with load factor increasing to 91% in June.

The airline, which operates bases at both Edinburgh and Glasgow airports and recently announced plans to establish its ninth UK base at Birmingham Airport, said in May that it expected to return to operating at pre-pandemic capacity this summer.

easyJet: Glasgow to Porto flights and package holidays launched

This year alone it has introduced new flights to Porto and Lisbon from Glasgow Airport and, from Edinburgh Airport, Santorini, Antalya and Lisbon. In November, it will launch a new year-round route from Glasgow to Southampton.

Analysts, meanwhile, cautioned that despite easyJet “riding high from the rebound in travel demand” and “more bums on seats per plane”, turbulence remains.

Danni Hewson, head of financial analysis at AJ Bell, said: “The outlook is far from rosy. It is facing a summer of disruption from strikes by airport and air traffic control workers, not to mention the prospect of soaring temperatures threatening to put people off travelling to parts of Europe.

“The company is cognisant of the risks but doesn’t seem too worried. Strikes have become part and parcel of the job in the aviation industry and consumers still seem happy to splash the cash on holidays despite the ongoing cost of living crisis.”

At Hargreaves Lansdown, lead equity analyst Sophie Lund Yates said: “EasyJet has beaten analyst expectations as it rides the wave of consumers seeking out budget options for their getaways. Planes are fuller too which helps margins, and customers also aren’t shying away from lucrative add-ons, which are jet fuel for the top line.”

But she warned: “The rebound in profits is a highly welcome change of path, but there are clouds gathering. Wider industry strikes have the potential to cause havoc across the system, and the extent of this won’t be known just yet. The broader implications of sweeping cancellations or changes will dent profit momentum in a big way if the issues are protracted.”

However, she noted that “easyJet’s doing a great job at controlling what it can, and the cost base and proposition are spot on”.