Ryanair cautious on fuel costs as full-year profit rises by 10%
- Credit: Press Association
Ryanair has booked a solid increase in full-year profits, but warned that rising oil prices could take the gloss off its performance over the next 12 months.
The budget carrier, which flies out of Stansted Airport, saw a 10% rise in post-tax profit to 1.45bn euros (£1.26bn) in the 12 months to March 31, while revenue jumped 8% to 7.15bn euros (£6.25bn).
Passenger numbers were also up, jumping 9% to 130.3m on the back of falling average air fares, which were down 3% to 39.40 euros.
The solid figures came despite what Ryanair described as a “rostering management failure”, when it was forced to cancel flights after mismanaging pilots’ annual leave.
The September debacle, which affected 700,000 passengers, came alongside pilot strike action.
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Ryanair boss Michael O’Leary said: “We are pleased to report a 10% increase in profits, with an unchanged net margin of 20%, despite a 3% cut in air fares, during a year of overcapacity in Europe, leading to a weaker fare environment, rising fuel prices, and the recovery from our September 2017 rostering management failure.”
However, the chief executive also struck a cautious tone over the airline’s prospects for the coming financial year, pointing to higher oil prices and Brexit.
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Ryanair expects unit costs over the next year to rise by 9% following the surge in oil prices, which have risen to 80 dollars per barrel. It will add more than 400 million euros to the group’s costs (£349m).
Staff costs will rise by almost 200m euros (£174m).
The net result will be a fall in profits to between 1.25bn euros and 1.35bn euros, Ryanair said.
On Brexit, the Irish carrier again said it continues to plan for a hard Brexit in March 2019.
In that scenario, UK shareholders will be treated as non-EU and this could “potentially affect Ryanair’s licensing and flight rights”.
As a result, Ryanair intends to “restrict the voting rights of all non-EU shareholders in the event of a hard Brexit”, in order to ensure it is majority-owned and controlled by EU shareholders at all times.
“This would result in non-EU shareholders not being able to vote on shareholder resolutions. In the meantime, we have applied for a UK AOC which we hope to receive before the end of 2018,” the firm added.