EasyJet Q3 sales up as new CEO faces challenges

A bus carrying passengers passes an Easyjet aircraft at Cointrin airport in Geneva April 20, 2010.

LONODN (Reuters) - EasyJet (EZJ.L) posted a 5.3 percent rise in third-quarter sales and its new chief executive pledged to make the carrier more efficient and repair its fractured relationship with a key shareholder.

Former Guardian Media boss Carolyn McCall, who replaced Andy Harrison as easyJet's Chief Executive earlier this month, said she was reviewing the business, with crewing shortages and punctuality at London's Gatwick airport -- where it is the largest carrier -- two of the main challenges facing her.

"We need to get Gatwick performing well for us because it affects the whole network," McCall told reporters on Wednesday.

"There are crew shortages in certain places and we need to get to the bottom of why."

Recent data from the UK's Civil Aviation Authority shows easyJet's punctuality performance at London airports has deteriorated year-on-year.

EasyJet's founder and largest shareholder Stelios Haji-Ioannou, who stepped down from the board in May, has threatened to remove the low-cost airline's right to the easy brand name if it doesn't improve its punctuality.

A court case over the interpretation of the brand licence agreement with easyGroup has finished and McCall expects a verdict by September, with the firm was prepared for the worst.

"The company has a contingency plan in terms of the brand," said McCall, who added that "lines of communication are open" between herself and Stelios.

Shares in easyJet were 1 percent down at 429.6 pence by 9:10 a.m., valuing the business at around 1.83 billion pounds.

"We're somewhat concerned by the operational problems experienced by the airline, which may not be completely one-off, and given the uncertainty created by the ongoing dispute with its largest shareholder, we're cautious," said Arbuthnot analyst Gerald Khoo, who holds a 'neutral' rating on the stock.

The airline said sales rose to 759.2 million pounds in the three months to the end of June, but that the ash cloud which spread across Europe in April had resulted in an 8 percent reduction in passenger numbers during the period.

It said its load factor -- a measure of how well it fills its planes -- increased by 1.4 points to 86.1 percent.

The ash disruption cost easyJet 65 million pounds but it stuck to its revised full-year pretax profit target of 100-150 million pounds, which it recently cut from 175-200 million.

(Editing by Victoria Bryan and Simon Jessop)