The budget airline, Ryanair has cut its full-year (2019) profit guidance following higher crude oil prices, staff strikes, compensation expenditure, and others.
Ryanair lowered its full year profit guidance (excluding Laudamotion) from a current range of €1.25 billion – €1.35bn, to a new range of €1.10bn – €1.20bn.
The airline said, lower traffic and weaker close in fares in September, caused by two days of co-ordinated pilot, cabin crew strikes in Germany, Holland, Belgium, Spain and Portugal have adversely impacted the company’s operations.
The company was forced to lower its profit guidance after higher EU261 care and re-accommodation costs arising from these recent strikes and higher crude oil prices.
“We now guide the financial year 2019 PAT in a new range of €1.10bn to €1.20bn (previously €1.25bn to €1.35bn). Second quarter fares are down approximately three per cent (previously guided one per cent) due to the weakness caused to close-in bookings and fares mainly as a result of these two co-ordinated strikes in September,” the company said.
“We had until last week expected stronger third quarter fares to recover softer second quarter yields but over the past week, third quarter fares and customer confidence have been affected by worries about possible strikes. We are now guiding second half fares down two per cent (previously flat),” the air carrier added.
The company’s fuel bill is expected to be approximately €460m higher (previously €430m) than last year and other costs will be negatively impacted by higher EU261 care and re-accommodation costs. Our slower traffic growth in the second half will cut financial 2019 traffic to 138m (previously 139m excluding Laudamotion).
Ryanair cannot rule out further disruptions in the third quarter, which may require full-year guidance to be lowered further and may necessitate further trimming of loss-making winter capacity.
Lakshmi Mittal 
