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Ryanair issues second profit warning in three months

Irish low-cost carrier Ryanair has issued a second profit warning in just three months. It has lo...
Newstalk
Newstalk

09.38 18 Jan 2019


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Ryanair issues second profit w...

Ryanair issues second profit warning in three months

Newstalk
Newstalk

09.38 18 Jan 2019


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Irish low-cost carrier Ryanair has issued a second profit warning in just three months.

It has lowered its full year profit guidance from between €1.1bn and €1.2bn to €1bn and €1.1bn

The company has said this is due to lower winter fares, which are expected to fall by 7%.

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It has also seen stronger traffic growth, up 9% to 142 million, and higher ancillary sales as more customers choose lower cost optional services.

Ryanair CEO Michael O'Leary said there is an over-capacity of short haul routes.

"While we are disappointed at this slightly lower full year guidance, the fact that it is the direct result of lower than expected H2 air fares, offset by stronger than expected traffic growth, a better than expected performance on unit cost and ancillary sales is positive for the medium term.

Ryanair CEO Michael O'Leary at a press conference at the Park Hyatt Hotel in Milan in 2016 | Image: Federico Ferramola/Zuma Press/PA Images

"There is short haul over capacity in Europe this winter, but Ryanair continues to pursue our price passive/load factor active strategy to the benefit of our customers who are enjoying record lower air fares.

"We believe this lower fare environment will continue to shake out more loss-making competitors, with WOW, Flybe, and reportedly Germania for example, all currently for sale."

Norwegian has also recently announced plans to close bases in Rome, Gran Canaria, Tenerife and Palma - where they directly competed with Ryanair.

But Mr O'Leary added: "We cannot rule out further cuts to air fares and/or slightly lower full year guidance if there are unexpected Brexit or security developments which adversely impact yields between now and the end of March."


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