Budget airline Ryanair repeats warning over potential impact of Brexit
- Credit: PA
Airline Ryanair has posted a jump in first-quarter profits, but repeated a warning that Brexit could cause disruption unless an aviation deal is struck between the UK and the European Union.
The budget carrier posted a 13% rise in revenue to 1.9bn euros (£1.7bn) in the three months to June 30, while profits soared 55% to 397m euros (£356m).
Ryanair, which is the largest operator at Stansted Airport, was boosted by the timing of Easter this year which contributed to a 12% increase in passenger numbers to 35m.
Average fares rose 1% in the period but Ryanair expects fares to fall by 5% in the first six months of the year and by 8% in the second amid tough competition in the sector and as it passes on lower fuel costs.
“We expect the pricing environment to remain very competitive,” Ryanair boss Michael O’Leary said.
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However, the group again sounded the alarm bell on Britain’s divorce from the EU as Ministers scramble to strike an aviation deal with the EU before March 2019.
Ryanair said: “While we continue to campaign for the UK to remain in the EU Open Skies agreement, we caution that, should the UK leave, there may not be sufficient time, or goodwill on both sides, to negotiate a timely replacement bilateral which could result in a disruption of flights between the UK and Europe for a period of time from April ’19 onwards.
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“If we do not have certainty about the legal basis for the operation of flights between the UK and the EU by autumn 2018, we may be forced to cancel flights and move some, or all, of our UK-based aircraft to continental Europe.”
Ryanair shares dipped nearly 3% to 17.6p in morning trading off the back of Mr O’Leary’s comments about pricing pressures and the fact that the carrier is seeing lower bag revenue.
Neil Wilson, senior market analyst at ETX Capital, said: “A huge jump in quarterly profits for Ryanair was not enough to assuage investor fears that the company is at the mercy of the pricing pressures felt across the sector. The push for more bums on seats means fares are coming down.”