(Sharecast News) - EasyJet reported a drop in third-quarter profit on Thursday as it took a hit from high fuel prices and a reduction in consumer demand following the onset of the Middle East conflict.
In the quarter to the end of June, headline pre-tax profit fell to £85m from £286m in the same period a year earlier.
EasyJet said fuel cost per available seat kilometre rose 13% - an absolute cost increase of £105m year-on-year.
Chief executive Kenton Jarvis said: "We have continued to manage the impact of the Middle East conflict, and its effect on fuel prices and booking trends, during the quarter. Pricing has been attractive, driving strong late booking demand for our flights and holidays and our relentless focus on execution has delivered an excellent operational performance and even greater levels of customer satisfaction.
"As consumer confidence increases, we are seeing the load factor gap close for peak summer and an extension of the booking curve as customers continue to prioritise travel and take advantage of our great fares."
The results came a day after the shares tanked on a report the European Union is preparing a review of airline ownership rules to prevent foreign investors from gaining effective control of carriers - a move that could threaten US bids for the budget airline.
According to Reuters, which cited an EU official, the EU review would "protect strategic autonomy" to ensure control of regional carriers remains within the bloc.
"This is to ensure that foreign investors don't have full control," the official told Reuters. "We need to make sure we have sufficient headroom when it comes to control."
EasyJet announced earlier this month that it had agreed to be taken over by private equity firm Apollo in a £5.7bn deal which trumped an earlier proposal by Castlelake.
At 0955 BST, the shares were up 5.4% at 616.50p.
Russ Mould, investment director at AJ Bell, said: "Having fallen sharply yesterday on fears tightened EU ownership rules might nix US bids for the airline, easyJet recovered some ground despite reporting falling profit today.
"The numbers laid bare the impact of the energy price shock unleashed by the Iran conflict as jet fuel costs soared. However, this will have come as little surprise to the market, which could find some solace from the solid customer numbers easyJet put up.
"People are booking later, with demand impacted by the turbulent geopolitical backdrop, but the package holidays business continues to deliver solid growth.
"The big question now is whether one of its US suitors can get a deal across the line or if red tape gets in the way and easyJet remains an independent entity."
See latest RNS on Investegate