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Photo: © Thorbjørn Brunander Sund, danishaviationphoto.com

Ryanair blames wave of factors as profits fall

The low-cost giant warns that full-year guidance is heavily dependent on fares not declining further.

Ryanair reported this morning a 7% fall in profits after tax for the first half of its financial year, to €1.2 billion, excluding losses at its recent purchase Laudamotion.

The low-cost giant blamed a number of factors, such as the average fares declining 3% due to excess capacity, an earlier Easter, repeated air traffic control strikes and staff shortages.

The strikes caused a wave of cancellations especially of higher-fare weekend flights, the carrier said.

In addition, higher costs in terms of fuel, staff and EU261 compensation have all combined to offset what it called strong ancillary revenue growth, which increased by 27%.

Traffic, meanwhile, grew 6% to 76.6 million passengers during the six months, with a load factor of 96%.

Full-year guidance is heavily dependent on fares not declining further, Ryanair said, warning that they remain soft this winter due to excess capacity in Europe. The first-half results come three weeks after the airline issued a profit warning.

Capacity cuts
Significantly higher oil prices on its unhedged exposures, the absence of unforeseen security events, ATC and other strikes, plus the impact of negative Brexit developments also dragged the results downward, Ryanair added.

“We cannot rule out further base closures or capacity cuts this winter if oil prices rise or air fares fall further,” it commented.

“Winter trading may be positively impacted by the rate and timing of other airline failures, which is already creating a ready supply of well-trained pilots and cabin crew for summer 2019 growth.”

Racial abuse
The results come as the airline faces another wave of negative publicity, this time accusations of inaction by cabin crew on one of its flights from Barcelona to London Stansted on Friday when an aggressive passenger racially abused an elderly woman.

Video of the incident has been circulating on social media – including around two million times on Facebook – with many people calling for a boycott of the airline.

Ryanair says it has reported the incident to the police in the UK.

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