Ryanair issues SECOND profit warning in four months as winter fares disappoint | City & Business | Finance

The Irish carrier slashed its forecast for the year ending March 31 to between €1billion (£878million) and €1.1billion (£966million). This is down from a previous prediction of between €1.1billion (£966million) and €1.2billion (£1billion) as the budget airline counted the cost of lower winter fares. Ryanair said the airline isexpecting winter fares to drop by seven percent, a far greater plunge than the previously guided two percent. The latest downgrade marks the second warning in quick succession after the airline said profits would be dented by crew strikes and the soaring cost of fuel.

CEO Michael O’Leary also warned further profit downgrades could be still to come.

He said: “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.

“While we have reasonable visibility over forward quarter four bookings, 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.”

However, the firm also expects stronger traffic growth of nine percent to 142 million and stronger ancillary sales as more customers choose lower cost optional services.

Last year, Ryanair booked profit of €1.45bn euros (£1.2bn) and the downgrade represents the second warning in quick succession.

Mr O’Leary also said that the competitive environment from the likes of WOW Air and Flybe will “shake out” some of Ryanair’s rivals.

He said: ”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.”

Ryanair will release its third quarter results on February 4.

The latest Ryanair strike was called off earlier this month.

It came after the two unions involved in the dispute – USO and Sitcpla – stood down the industrial action after holding talks in Madrid with Ryanair representatives.

Ryanair staff working for the budget airline in Spain were set to stage a walk out on January 8.

The strike centred around staff in Spain being handed Irish versions of contracts, rather than Spanish ones, under local law.

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