Ryanair profit warning after lowering fares over winter

Ryanair has that lower winter fares may hit profits Picture: CHRIS RADBURH/PA WIRE

Ryanair has that lower winter fares may hit profits Picture: CHRIS RADBURH/PA WIRE - Credit: PA

Stansted Airport carrier Ryanair has warned over profits as short-haul over-capacity in Europe hit winter prices.

The Irish operator has lowered its full-year post-tax profit guidance from between £966m to £1bn to a new range of £878m to £966m.

It said winter fares are expected to fall 7%, a much bigger drop than the previously guided fall of 2%.

Boss Michael O’Leary also warned that he cannot rule out further downgrades to profit guidance.

“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,” he said.

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“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 9% to 142 million and stronger ancillary sales as more customers choose lower cost optional services.

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Mr O’Leary also predicted the competitive environment will “shake out” some of Ryanair’s rivals.

“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,” he said.

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