UK's easyJet beats annual profit expectations, lifts target for holidays business

By Joanna Plucinska and Yamini Kalia

LONDON (Reuters) -British carrier easyJet reported better-than-expected full-year operating profit on Tuesday and upgraded its medium-term target for its holidays business after meeting the previous goal early.

European airlines have reported mixed results in the final quarters of the year as spiraling costs and repercussions from air traffic control strikes weigh on their balance sheets despite strong demand.

Low-cost carrier easyJet's headline operating profit for the financial year ended September grew to 703 million pounds ($921.1 million), above the 669.37 million pounds projected by analysts polled by LSEG.

EasyJet holidays, the company's high-margin package holiday arm, is now expected to log 450 million pounds in pretax profit by 2030, having hit its previous medium-term target of 250 million pounds this year.

"We are well placed to seize the significant opportunities ahead, and we are confident in achieving our medium-term goal of delivering over 1 billion pounds in profit before tax," CEO Kenton Jarvis said in a statement.

The holidays business has helped easyJet bolster its results in recent years, as a resurgence in price-controlled packaged holidays for price-sensitive consumers has boosted the airline sector. 

The carrier said in July it expected good profit growth despite higher fuel prices and the negative impact of French air traffic control strikes on its earlier results. 

EasyJet, which operates an Airbus fleet equipped with CFM engines, has dodged many of the issues that have plagued the airline industry with servicing delays at engine maker Pratt and Whitney.

($1 = 0.7632 pounds)

(Reporting by Joanna Plucinska in London and Yamini Kalia in Bengaluru; Editing by Subhranshu Sahu and Jan Harvey)