Ryanair has issued a profit warning after suffering crew strikes and rising fuel prices – but the budget airline is still projected to make £1 billion.
On Monday, Ryanair announced that its full-year profits will be 12% lower than expected, dropping its projection to €1.1bn to €1.2bn (£978m to £1bn) – which is still pretty impressive.
The news did affect the stock market though, as by Monday lunchtime Ryanair’s share price had dropped by just over nine percent.
It’s been a tough year for the airline with pilot and cabin crew strikes disrupting departures across Europe, knocking passenger numbers and leading to thousands of refunds and compensation payouts.
The start of 2018 also saw delays and cancellations when the “Beast from the East” storm brought cold weather and snow to the UK.
These disruptions have hit customer confidence in the company, with passengers making fewer forward bookings into the third quarter including for the October school half-term and Christmas.
Ryanair has also cited rising oil prices as a reason for the decline in profits.
Addressing the news, the airline’s chief executive Michael O’Leary was keen to highlight how his company dealt with the industrial action, saying they “successfully managed five strikes by 25% of our Irish pilots this summer”.
He added: “Two recent co-ordinated strikes by cabin crew and pilots across five EU countries has affected passenger numbers (through flight cancellations), close in bookings and yields (as we re-accommodate disrupted passengers), and forward air fares into Q3 [autumn].
“While we regret these disruptions, we have on both strike days operated over 90% of our schedule.”
Further staff strikes could force the company to issue future profit warnings.
Ryanair has cut its capacity for winter 2018 by 1% in response to the additional financial pressures.
Starting from 5 November, it will close its four-aircraft Eindhoven base, its two-aircraft Bremen base and reduce its five-aircraft Niederrhein base to three. Most routes will either continue with remaining aircraft, or foreign and non-German aircraft.