Ryanair profits down by more than a quarter, company says

Ryanair Stock Falls as Price War Threatens Summer ProfitsMore

RYANAIR has reported its lowest profit in four years, with the Irish low-cost carrier blaming a fall in air fares on the back of "negative Brexit developments".

The company suffered a loss of €139.2 million at Austrian division Lauda Air Luftfahrt GmbH, acquired in December after the main airline posted net income of €1.02 billion, still much lower than a year earlier.

The company had forecast a profit of between €1 billion and €1.1 billion, and a company poll of over 10 analysts published ahead of the release had forecast €1.03 billion. Davy Stockbrokers said it would cut its forecast by 9 per cent but believed that the "nadir point" had likely been reached.

Although passenger numbers were up 7% to 139m average fares fell 6% to €37 per passengers, despite a strong rise of 19% in ancillary sales to €2.4bn. Market leader Deutsche Lufthansa AG has frozen capacity at its discount arm, while Thomas Cook Group PLC's share price plummeted last week after analysts said the holiday firm's debt now exceeds its value amid faltering demand. "If that weren't enough, oil prices are on the rise and excess capacity is adding to the pressure on profitability".

Europe's largest budget airline Ryanair announced on Monday that its profit for the fiscal year 2019 (FY2019) went down by 29 percent mainly due to declining fares and rising costs.

Ryanair has confirmed it will not take delivery of its first B737 Max aircraft until this winter, while stressing that "we continue to have utmost confidence in these aircraft".

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It expects most of the first batch of around 50 aircraft to be flying by next summer, Mr O'Leary said.

It came as the London-listed company reported revenue of £23.8 million for the three months to March 31, down from £24.5m this time a year ago. But it still expects to fly 153 million passengers in the period, up from 139 million past year.

"The delayed deliveries in 2019 means that we will not see any meaningful cost benefit until FY21", the company said.

The airline plans to have a conversation with Boeing about "modest compensation", Chief Financial Officer Neil Sorohan said.

The company's board approved a €700m share buyback programme which was set to commence during the current week and run over the next nine to 12 months.

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