Ryanair profits descend by a fifth amid turbulence in Germany and UK
Ryanair has reported a 21 per cent fall in profits to €243 million (£219m) in the first quarter of this financial year.
The low-cost airline cited lower fares and higher costs for fuel and staff as reasons for the decline during the three months to the end of June.
Chief executive Michael O’leary said: “The two weakest markets were Germany, where Lufthansa was allowed to buy Air Berlin and is selling this excess capacity at belowcost prices, and the UK, where Brexit concerns weigh negatively on consumer confidence and spending.”
The airline said its average fares fell 6 per cent year on year during the quarter, but this was partially offset by 14 per cent higher ancillary revenue, such as baggage, food and other extras.
The drop in fares is expected to continue during the summer season, and across the whole financial year will be “towards the lower end” of -2 per cent to +1 per cent, it added.
Earlier this month, the firm slashed its expected growth rate for summer 2020 from 7 per cent to 3 per cent amid a delay in deliveries of the Boeing 737 Max aircraft.
It was due to have 58 of the planes for that season, but now expects to receive just 30.
The airline believes deliveries will begin in “January at the earliest”, Ryanair said yesterday.
O’leary added that the airline will “continue to negotiate attractive growth deals as airports compete to attract Ryanair’s reliable traffic growth”.
Passenger numbers are expected to grow by 7 per cent to more than 152 million for the year to 31 March, which is slightly less than the 153 million previously forecast due to the Max delays.
The forecast for profits after tax for the year remains unchanged at between €750m and €950m.