EasyJet PLC (LSE:EZJ) shares fell 6.5% to 491p after the budget airline flagged headwinds from French air traffic control (ATC) strikes and higher fuel costs.
Total cost per seat kilometre (CASK) is expected to fall by low single digits, or flat when fuel is excluded, as costs in the second half are expected to be up slightly on slower growth and ATC strike impacts.
Second half fuel CASK is seen falling 7%, not as much as the 8% decline previously hoped.
Overall, management anticipates a £10 million adverse impact from recent higher fuel costs and £15 million from French ATC industrial action.
CEO Kenton Jarvis said the airline "performed well" in the quarter but is "extremely unhappy" with the French air traffic strikes in early July.
As well as presenting "unacceptable challenges for customers and crew also created unexpected and significant costs for all airlines", he added.
On the plus side, the FTSE 100 group lifted guidance for its Holidays business to at least £235 million of profit before tax for the full year.
Overall, it expects "good profit growth" for the full year, after reporting a 21% increase in pre-tax profit to £286 million for its third quarter.
The division continues to show strong momentum heading into the winter season, with 50% of the first quarter of next year already sold, the company noted, raising the need for a new medium-term target, which will be set towards the end of this year.
Seat capacity growth will moderate in the second half of the year, with available seat kilometres (ASK) set to rise around 9% year-on-year, easing to 7% in the second half from 12% in the first.
For the group as a whole, around 19% of Q1 FY26 seat capacity is already sold, up one percentage point from a year earlier.
** Update: Adds share price, more details on costs **