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Ryanair profits take off but airline reissues Brexit warning Ryanair profits take off but airline reissues Brexit warning
(about 4 hours later)
Ryanair made £11.40 profit from every passenger it carried in the three months to June – up more than £3 a head on the same time a year ago.Ryanair made £11.40 profit from every passenger it carried in the three months to June – up more than £3 a head on the same time a year ago.
However the airline remained cautious, issuing another warning about the disruption that could be caused by Brexit to UK flights in 2019.However the airline remained cautious, issuing another warning about the disruption that could be caused by Brexit to UK flights in 2019.
The Irish budget airline expects fares to fall by 5% this summer. The average fare rose by 1% to just over €40 (£35.80) between April and June, its first quarter.The Irish budget airline expects fares to fall by 5% this summer. The average fare rose by 1% to just over €40 (£35.80) between April and June, its first quarter.
Ryanair’s profits over the last three months soared 55% to €443.7m, up from €286.5m a year earlier. The airline carried 35 million passengers, up 12% from last year. This means it made a profit per passenger of €12.70 (£11.40), up from €9.20 (£8.20).Ryanair’s profits over the last three months soared 55% to €443.7m, up from €286.5m a year earlier. The airline carried 35 million passengers, up 12% from last year. This means it made a profit per passenger of €12.70 (£11.40), up from €9.20 (£8.20).
The Ryanair chief executive, Michael O’Leary, said the profits were boosted by the timing of Easter, but this was partly offset by the weaker pound and less revenue from checked bags as more customers took advantage of the airline’s two free carry-on bags policy. However, only the first 90 passengers with wheelie bags are guaranteed space in the cabin.The Ryanair chief executive, Michael O’Leary, said the profits were boosted by the timing of Easter, but this was partly offset by the weaker pound and less revenue from checked bags as more customers took advantage of the airline’s two free carry-on bags policy. However, only the first 90 passengers with wheelie bags are guaranteed space in the cabin.
The airline cut costs by 6% as its fuel bill fell, despite the increase in passenger numbers. Keeping plane purchase, maintenance and staff costs low has allowed Ryanair to undercut rivals while raising profits.The airline cut costs by 6% as its fuel bill fell, despite the increase in passenger numbers. Keeping plane purchase, maintenance and staff costs low has allowed Ryanair to undercut rivals while raising profits.
The fare cuts appear to have spooked investors, with Ryanair shares falling more than 5% in early trading. Rival EasyJet was also down, by more than 3%.The fare cuts appear to have spooked investors, with Ryanair shares falling more than 5% in early trading. Rival EasyJet was also down, by more than 3%.
Neil Wilson, senior market analyst at City firm 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.”Neil Wilson, senior market analyst at City firm 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.”
Ryanair also confirmed it had made a bid for the struggling Alitalia, the Italian flag carrier which was put in special administration in May. Ryanair said it had put in a non-binding bid on Friday, the deadline, along with a number of other interested parties.
The Irish airline is already the biggest player in Italy, with a near 30% market share. O’Leary said that any takeover of Alitalia would be dependent on the airline being restructured and the removal of Italian government influence.
Ryanair expects to carry 131 million passengers in the 12 months to March 2018, 1 million more than previously estimated, but stuck to its full-year forecast of post-tax profit of €1.4bn to €1.45bn.Ryanair expects to carry 131 million passengers in the 12 months to March 2018, 1 million more than previously estimated, but stuck to its full-year forecast of post-tax profit of €1.4bn to €1.45bn.
Ryanair continues to expand, ordering a further 10 “Game Changer” aircraft in June. It also agreed extensions of 10 operating leases.Ryanair continues to expand, ordering a further 10 “Game Changer” aircraft in June. It also agreed extensions of 10 operating leases.
The Dublin-based company reiterated that it may be forced to cancel flights and move some, or all, of its UK-based aircraft to continental Europe from April 2019 depending on the terms of the UK’s exit from the EU in March 2019.The Dublin-based company reiterated that it may be forced to cancel flights and move some, or all, of its UK-based aircraft to continental Europe from April 2019 depending on the terms of the UK’s exit from the EU in March 2019.
It continues to campaign for the UK to remain in the EU “open-skies” agreement, but is worried that “should the UK leave, there may not be sufficient time, or goodwill on both sides, to negotiate a timely replacement bilateral”.It continues to campaign for the UK to remain in the EU “open-skies” agreement, but is worried that “should the UK leave, there may not be sufficient time, or goodwill on both sides, to negotiate a timely replacement bilateral”.
The open-skies regulation allows all EU airlines and others in the “common travel area” including Morocco, Iceland, Norway and Switzerland to fly in and out of any country signed up to the pact. It binds EU members to regulatory oversight by the European court of justice and to freedom of movement, two red lines for the current UK government in Brexit talks.The open-skies regulation allows all EU airlines and others in the “common travel area” including Morocco, Iceland, Norway and Switzerland to fly in and out of any country signed up to the pact. It binds EU members to regulatory oversight by the European court of justice and to freedom of movement, two red lines for the current UK government in Brexit talks.
Ryanair had previously warned it would have to halt flights from the UK “for weeks or months” if the UK government did not strike a bilateral aviation deal. “Those trips down to Portugal and Spain, unless you can swim, aren’t really going to happen,” its finance chief told the Guardian in April.Ryanair had previously warned it would have to halt flights from the UK “for weeks or months” if the UK government did not strike a bilateral aviation deal. “Those trips down to Portugal and Spain, unless you can swim, aren’t really going to happen,” its finance chief told the Guardian in April.