EasyJet shares dive on profit-warning

LONDON: EasyJet shares slumped on Tuesday as the budget carrier said a strike by French air traffic controllers last month would slash profits.

It comes after the British airline said it had managed an unlikely profit during its first half, a period when carriers normally report losses, thanks to lower fuel costs and a stronger pound.

But EasyJet shares tumbled almost 8.0 percent in morning deals in London after it said that April's strike action by French air traffic controllers would hit pre-tax profits by £25 million ($39 million, 35 million euros).

"Warning of turbulence ahead has taken the shine off a sunny start after delivering profits in its seasonally weaker first half," said Peter Ward, dealer at London Capital Group.

"Cheaper fuel costs helped the first half as expected, but... French strike action as EasyJet embarks upon its key summer travel season has ruffled investors."

The British airline reported a net profit of £5.0 million in the six months to the end of March compared with a loss after tax of £41 million one year earlier.

EasyJet, like its rivals, tends to post losses during the northern hemisphere winter when it carries fewer passengers compared with the peak summer holiday season.

"As expected the lower oil price has been beneficial for customers and EasyJet will be able to offer its customers even better value fares this summer whilst continuing to grow revenue and profit," the airline said in an earnings statement.

Oil prices slumped for most of the reporting period on a supply glut, making the cost of jet fuel -- which is refined from crude -- cheaper.

EasyJet had meanwhile announced in late March that earnings had benefited during its first half from currency movements after the European single currency slumped to multi-year low points against the pound and dollar on the back of eurozone strains.

In late morning trade, shares in EasyJet were down 7.97 percent at 1,687 pence on London's benchmark FTSE 100 index, which was 2.0-percent lower at 6,889.17 points.