Britain's easyJet raised its annual forecast for its holidays division after reporting a 16% increase in third-quarter group pretax profit on Wednesday, helped by strong summer travel and more customers looking for budget trips.

The low-cost carrier posted headline pretax profit of 236 million pounds ($304.3 million) for the three months ended June 30, against 203 million pounds reported a year earlier.

"We remain on track to deliver another record-breaking summer, taking us a step closer to our medium-term targets," CEO Johan Lundgren, who is leaving next year, said in a statement.

EasyJet said the outlook for its fiscal 2024 is positive, without giving a specific profit forecast.

The post-pandemic boom in air travel has normalised as travellers baulk at higher fares, airline executives said at the Farnborough Airshow on Monday after Ryanair posted a profit slump and warned ticket prices were continuing to deteriorate.

Airline revenue per seat for the quarter was up 1% and the trend is expected to continue into the fourth quarter, easyJet said.

The London-listed airline lifted its profit forecast for easyJet holidays to more than 180 million pounds in the full year from a previous expectation of 170 million pounds.

Launched in 2019, easyJet holidays, which accounted for more than a quarter of group pretax profit last year, offers travel packages and encourages customers travelling on leisure to spend more with the airline.

Ryanair's warning on Monday sent chills across the European airline industry, deepening fears of a weak summer. While holidaymakers are still flocking to travel destinations worldwide, airlines have been pressured to discount fares to fill their planes.

Bookings for the fourth quarter continue to build, with 69% now sold, easyJet said.

($1 = 0.7756 pounds)

(Reporting by Yadarisa Shabong in Bengaluru; Editing by Nivedita Bhattacharjee and Jan Harvey)