Ryanair profit gains despite flight cancellations

LONDON: Ryanair Holdings Plc’s first-half earnings gained 11% as price declines stabilised over the peak summer months, more than offsetting the cost of a pilot shortage that triggered flight cancellations for about 700,000 passengers.

Net income in the six months to Sept 30 rose to 1.29 billion euros (US$1.5bil) from 1.17 billion euros a year earlier, Dublin-based Ryanair said yesterday.

Europe’s biggest discount airline stood by its forecast for full-year profit in the range of 1.4 billion euros to 1.45 billion euros, even after paying out 25 million euros on refunds and 40 million euros for extra staffing costs.

Ryanair has scrapped more than 20,000 flights following a botched rescheduling of pilot leave to meet a change in Irish labour rules.

Employee poaching by competitors including Norwegian Air Shuttle ASA has exacerbated the crew shortage, and while the reduced schedule affects only a small percentage of flights, it has impacted expansion plans and encouraged labour leaders to push for unionisation.

“These strong results reinforce the robust nature of Ryanair’s low fare, pan-European growth model even during a period which suffered a material failure in our pilot rostering function,” chief executive officer Michael O’Leary said in the earnings statement.

He pledged to review pilot rotas, bases and pay as the company seeks a permanent settlement to the crisis.

Fares fell 5% in the fiscal first half, compared with an initial forecast for an 8 percent slide, and are set to drop by 4 to 6 percent in the second six months, better than an earlier prediction of 5% to 7%, Ryanair said.