Southern European Resort Travel Boosts easyJet

British low-cost airline easyJet forecast annual profit growth of up to 14 percent, helped by higher demand for travel to sunshine destinations.

Revenue performance in the three months to the end of June was better than easyJet had forecast in May, boosted by increased demand for flights to southern European resorts such as Malaga, Alicante and Faro from northern Europe, and Britain in particular.

The strength of the pound against the euro is making holidays on the continent particularly appealing for Britons this year. The euro hit a 7-1/2-year low against the pound last Friday, having shed around 10 percent against the currency since the start of the year.

EasyJet did, however, warn that it faced a series of uncertainties in future given the crisis in Greece, an attack on tourists in Tunisia, the impact of a fire at Fiumicino airport in Rome and various threats of industrial action.

Despite these uncertainties, it forecast profit growth of between 7 and 14 percent for the year to the end of September.

The divergent performances reflect concerns about Ryanair's move into what has traditionally been easyJet's territory, after the Irish carrier polished up its image and started adding more main city airports to its routes.

But some analysts believe those fears are overdone. Ryanair and easyJet compete directly on less than 5 percent of routes, and easyJet is years ahead of Ryanair in having built a network based on primary airports closer to large cities.

The easyJet strategy would help it continue to win in what it called a "more competitive market," the company said.