Ryanair prof­its dip amid cuts in fares and tough out­look

Belfast Telegraph - Business Telegraph - - Platform - BY STAFF RE­PORTERS

PROF­ITS at Ryanair dipped in the third quar­ter amid a back­drop of tough com­pe­ti­tion and a chal­leng­ing out­look.

The Ir­ish car­rier said profit af­ter tax fell 8% to €95m (£81m) in the three months to the end of De­cem­ber. The firm said av­er­age fares fell 17% to €33 per pas­sen­ger as it ramped up com­pe­ti­tion with ri­vals, with prices set to go even lower.

Ryanair chief ex­ec­u­tive Michael O’leary also said the col­lapse in ster­ling fol­low­ing the EU ref­er­en­dum “ex­ac­er­bated” the hit from fall­ing fares.

“As pre­vi­ously guided, our fares this win­ter have fallen sharply as Ryanair con­tin­ues to grow traf­fic and load fac­tors strongly in many Euro­pean mar­kets,” he said.

“These fall­ing yields were ex­ac­er­bated by the sharp de­cline in ster­ling fol­low­ing the Brexit vote.

“Ryanair re­sponded to this weaker en­vi­ron­ment by con­tin­u­ing to im­prove our Al­ways Get­ting Bet­ter customer ex­pe­ri­ence, cut­ting costs, and stim­u­lat­ing de­mand through lower fares which has seen load fac­tors jump to record lev­els.”

Last year Ryanair made a re­turn to Belfast, launch­ing more than a dozen city and sun routes.

Mr O’leary warned Ryanair is likely to even­tu­ally pull out of City of Derry air­port en­tirely, tak­ing out its re­main­ing Liver­pool and Glas­gow routes.

The lat­est fig­ures show traf­fic across the busi­ness grew 16% to 29 mil­lion cus­tomers and Ryanair main­tained its full year profit guid­ance of between €1.3bn (£1.12bn) to €1.35bn (£1.16bn), but said this is de­pen­dent on the ab­sence of any “un­fore­seen se­cu­rity events” tak­ing place, adding the out­look for 2017 is “cau­tious”.

In July, the car­rier said the de­ci­sion by Bri­tain to quit the Euro­pean Union was “a sur­prise and a dis­ap­point­ment”, and it would “pivot” growth away from UK air­ports and fo­cus more on grow­ing Euro­pean air­ports over the next two years.

On Mon­day, Ryanair re­it­er­ated the stance, say­ing: “While it ap­pears that we are head­ing for a ‘ hard’ Brexit, there is still sig­nif­i­cant un­cer­tainty in re­la­tion to what ex­actly this will en­tail.

“This un­cer­tainty will con­tinue to rep­re­sent a challenge for our busi­ness for the re­main­der of 2017 and 2018.

“We ex­pect ster­ling to re­main volatile for some time and we may see a slow­down in eco­nomic growth in both the UK and Europe as we move closer to Brexit. While there may be op­por­tu­ni­ties to ex­pand at cer­tain UK air­ports (such as the re­cent ex­ten­sion of our growth deal at Stansted), we ex­pect to grow at a slower pace than pre­vi­ously planned in the UK”.

Bri­tish air­lines are wait­ing with bated breath to dis­cover whether the UK will re­main a mem­ber of the EU’S Open Skies avi­a­tion free mar­ket.

Mr O’leary has con­tin­u­ally said the scrap­ping of air pas­sen­ger duty would be “huge” and could dou­ble the num­ber of pas­sen­gers fly­ing in to Belfast through Ryanair.

He said if Stor­mont had re­moved the £13 a flight duty, his air­line would not be cut­ting ser­vices. He pre­vi­ously said Ryanair would have added a fourth plane to Belfast if the UK hadn’t voted for Brexit.

Ryanair CEO Michael O’leary says the Brexit vote has been bad for busi­ness

Newspapers in English

Newspapers from UK

© PressReader. All rights reserved.