Ryanair profits rise despite ‘difficult’ trading environment

AVIATION: Budget carrier warns of risk from ‘negative’ Brexit developments

Low-cost carrier Ryanair pledged to continue cutting fares as it posted a 6% rise in annual profits despite intense competition and impact of the Brexit vote.

Chief executive Michael O’Leary said the Irish airline faced “difficult” trading as the group posted profits of £1.14 billion for the year to March 31.

It slashed fares by 13% on average over the year amid competition in the sector and expects to reduce fares by a further 5% to 7% due to the weak pound and as it passes on lower fuel costs.

The group said the year was marred by terrorist attacks across Europe, confirming flight bookings fell in the aftermath of the explosion at the Manchester Arena last week.

Ryanair is “cautiously” forecasting profits to rise by 8% to £1.2bn to £1.3bn for the year to next March.

However, Mr O’Leary warned: “Investors should be wary of the risk of negative Brexit developments, or any repeat of last year’s security events at European cities, which could damage consumer confidence, close-in bookings, and this full year 2018 guidance.”

He added the group would “continue to pivot our growth away from the UK” amid uncertainty caused by Brexit.

Ryanair reported a 13% rise in passengers, to 120 million in the year to March 31, but admitted it was impacted by delays due to air traffic control strikes and weather disruption at the end of last year.

Its punctuality fell to 88% from 90% the previous year.

The Dublin-based carrier, which flies 1,800 daily flights across 33 countries, is targeting 130m passengers over the year ahead, suggesting a slowdown in growth to around 8%.

While Ryanair’s profits rose to another record high, the group took a hit from the weak pound since the Brexit vote.

It warned over profits last October after fares fell more than expected, while airlines have also been knocked by a price war and a shift away from popular destinations Egypt and Turkey after terrorist attacks and political turmoil.

Ryanair profits were up last year but the airline is continuing to face challenges.