Ryanair blames pound as it cuts profit forecast

The airline expects a 5% shift in the wrong direction as the sterling weakens....

Ryanair, Michael O'Leary, Brexit, referendum, London, Union Jack suit

Ryanair CEO Michael O'Leary in London urging Britons to vote Remain in the EU referendum | Image: Ryanair

Ryanair has cut its full-year profit guidance by 5% – blaming the impact of the fall in the value of the pound since the UK's Brexit vote.

The no-frills carrier said an 18% reduction in sterling's value meant profits would be down on its previous guidance to between €1.3bn (£1.17bn) and €1.35bn.

It will also reduce H2 average fares by between 13% to 15% as opposed to the previosuly guided 10% to 12%.

Ryanair – which had campaigned for the UK to remain in the EU – cautioned that its new guidance was conditional on the pound remaining at current levels. It hit a new six-year low against the euro on Monday.

The airline also now expects that full year traffic will increase to 119 million, which is 12% growth on last year’s 106 million customers.

Ryanair CEO Michael O’Leary said in a statement:

“The recent sharp decline in sterling post-Brexit (which accounts for approx. 26% of Ryanair’s FY17 revenues) will weaken H2 yields by slightly more than we had originally expected. While higher load factors, stronger traffic growth and better cost control will help to ameliorate these weaker revenues, it is prudent now to adjust full year guidance which will rise by approx. 7% (over FY 2016) rather than our original guidance of 12%. This decline is primarily due to the impact of weaker Sterling on our H2 fares.

"We would caution that this revised guidance remains heavily dependent upon no further weakness in H2 fares (-13% to -15%) or sterling from its current levels (€1 = £0.9050). As Ryanair will continue to be load factor active and price passive throughout the winter season at these low prices, there has never been a better time for customers to book or fly with Ryanair."