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Ryanair warns of airline fares war this summer Ryanair warns of airline fares war this summer
(about 1 hour later)
Ryanair says it could cut fares by as much as 9% on some routes as competition in the airline industry intensifies in the next few months.Ryanair says it could cut fares by as much as 9% on some routes as competition in the airline industry intensifies in the next few months.
The warning from Europe's largest carrier by passenger numbers follows similar comments about price pressures from Ryanair's rivals in recent weeks.The warning from Europe's largest carrier by passenger numbers follows similar comments about price pressures from Ryanair's rivals in recent weeks.
Competition was growing as airlines switched capacity from Turkey and North Africa, Ryanair said.Competition was growing as airlines switched capacity from Turkey and North Africa, Ryanair said.
The comments came as Ryanair reported a 55% rise in quarterly profits. The comments hit Ryanair's shares, despite it posting a big profits rise.
Pre-tax profits rose to 397m euros (£356m) in the three months to 30 June, helped by a stronger Easter. Revenues were up 13% to 1.68bn euros. Pre-tax profits rose 55% to 397m euros (£356m) in the three months to 30 June, helped by a stronger Easter. Revenues were up 13% to 1.68bn euros.
The average fare during the quarter rose 1% to 40.3 euros, although Ryanair said this was a blip due to the much stronger Easter trading. The average fare during the quarter rose 1% to 40.3 euros, although Ryanair said this was a blip due to the much stronger Easter trading. Easter, a peak-time for holidaymakers, fell in April this year, inside Ryanair's reporting period. In 2016, it fell in March.
The airline said it expected fares to fall by 5% in the six months to the end of September and by 8% in the six months to the end of March 2018.The airline said it expected fares to fall by 5% in the six months to the end of September and by 8% in the six months to the end of March 2018.
"We expect the pricing environment to remain very competitive" chief executive Michael O'Leary said in a statement. Easyjet and Wizz Air have both said that fares will be under pressure this summer. "We expect the pricing environment to remain very competitive" chief executive Michael O'Leary said in a statement. EasyJet and Wizz Air have both said that fares will be under pressure this summer.
Ryanair executives also repeated warnings of major flight disruptions between the UK and Europe if Brexit talks fail to agree a bi-lateral deal on flights. The airline has warned it may cancel flights and move operations abroad if there is no agreement well in advance of Brexit. The warning sparked a 4.7% fall in Ryanair's share price at the start of trading. EasyJet shares fell 3.5%, while the owner of British Airways, IAG, fell 2.5%.
Ryanair executives also repeated warnings of major flight disruptions between the UK and Europe if Brexit talks fail to agree a bi-lateral deal on flights. The airline has warned it may cancel flights and move operations abroad if there is no agreement well in advance of Brexit.
"We need clarity so that we can plan our schedules for 2019," chief financial officer Neil Sorahan told the BBC."We need clarity so that we can plan our schedules for 2019," chief financial officer Neil Sorahan told the BBC.
EasyJet announced last week that it had secured an air operator's certificate in Austria to enable it to keep flying across the EU following Brexit.