Ryanair lowers profit outlook on labour strife, fuel costs

PARIS: Ryanair Holdings Plc became the latest European airline to warn about mounting costs, saying labor strife and higher fuel prices are taking their toll.

Europe’s biggest discount carrier cut its full-year profit guidance by about 12%, to between 1.1 billion euros (US$1.27bil) and 1.2 billion euros, according to a statement yesterday.

Two days of strikes in September translated into lower traffic and fares, as well as fewer bookings in October as customers feared more walkouts, it said.

Higher fuel prices also added to costs, sig- nalled by rival EasyJet Plc last week.

Ryanair said it would trim its winter schedule by 1%, pulling four aircraft from a base at the Dutch city of Eindhoven, and two from Bremen, Germany. It will also cut back flights out of the German base of Niederrhein, the statement said.

The shares dropped as much as 12% in Dublin, the most in more than two years, while EasyJet shares fell as much as 6.3%.

Ryanair chief executive officer Michael O’Leary, who has presided over years of rising profits and passenger growth at Europe’s biggest discount airline, has grappled with a turbulent year and was already forecasting its first profit drop since 2014 this fiscal year.

The company was forced to reverse its long-held policy of not recognising unions last year in the wake of a scheduling crisis that gave staff increased bargaining power.

While it notched a deal with Irish pilots in August, most other unions are holding out.

“While we successfully managed five strikes by 25% of our Irish pilots this summer, two recent coordinated strikes by cabin crew and pilots across five EU countries has affected passenger numbers,” O’Leary said in the statement.