industry

Ryanair slumps to FIRST LOSS since March 2014 – share price plummets


The loss, which the budget airline attributed to cheaper-then-expected air fares, compared to a profit of £92.4 million in the same period a year ago. Ryanair also blamed excess winter capacity in Europe for six percent reduction in average fares to under €30, while it has also had to contend with higher costs from fuel, staff and compensation claims. The airline’s shares fell 3.2 percent in early morning trading on the London Stock Exchange.

But revenue did rise nine percent to £1.3 billion and passenger numbers increased eight percent to 32.7 million during the period.

Ryanair chief executive Michael O’Leary said: “While a €20m loss in Q3 was disappointing, we take comfort that this was entirely due to weaker than expected air fares so our customers are enjoying record low prices, which is good for current and future traffic growth.

“While ancillary revenues performed strongly, up 26 percent in Q3, this was offset by higher fuel, staff and compensation costs.”

The airline maintained it is on course to achieve full-year profits of £880m – £960m, excluding its recently acquired loss-making Austrian carrier Laudamotion.

But Ryanair repeated it is not ruling out further cuts to its guidance “especially if there are unexpected Brexit and/or security developments which adversely impact fares for close-in bookings between now and the end of March”.

Mr O’Leary said: “The risk of a no-deal Brexit remains worryingly high.

“While we hope that common sense will prevail, and lead either to a delay in Brexit, or agreement on the 21-month transition deal currently on the table, we have taken all necessary steps to protect Ryanair’s business in a no-deal environment.”

Ryanair has already obtained a UK licence to protect domestic routes in the event of a no-deal Brexit and has also temporarily made changes to its share voting rights structure so it remains an EU-owned and controlled business.

The latest quarterly loss also comes amid a management shake-up at the airline, which has seen Mr O’Leary agree a new five-year contract as chief executive to take him through to July 2024.

His role will change slightly as he will oversee and manage chief executives for each airline brand: Ryanair, Laudamotion, Ryanair Sun and Ryanair UK.

Chairman David Bonderman, who has spent 23 years in the job, will lead the Ryanair board until summer 2020, but will not put himself up for re-selection.

He will be succeeded by Stan McCarthy, who joined the board in 2017.

In September, at the firm’s AGM, almost 30 percent of shareholders voted against the re-election of Mr Bonderman as chairman following a summer of slight cancellations.



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