Ryanair lowers profit forecast for 2019
Ryanair expects its profits for the year to come in 10% lower than expected.
The initial target was between €1.1bn and €1.2bn, but that has now been lowered to between €1bn and €1.1bn.
The company said it is a result of very competitive conditions in the European aviation market which has caused it to lower its average fares by 7%.
Ryanair’s Michael O’Leary said: “While we are disappointed at this slightly lower full-year guidance, the fact that it is the direct result of lower than expected H2 airfares, offset by stronger than expected traffic growth, a better than expected performance on unit cost and ancillary sales is positive for the medium term.
"Both Ryanair and Lauda will report stronger than expected traffic growth, an improving ancillary revenue performance, and strong unit cost discipline this winter, which helps to defray the impact of these lower than expected winter fares. The fact that we are passing on these benefits, in the form of lower airfares, to customers is good for Ryanair’s traffic growth, good for our business over the medium and long term, and good for market share as evidenced by Norwegian’s recent announcement of its plans to close bases in Rome, Gran Canaria, Tenerife and Palma, where they competed head-to-head with Ryanair.
"While we have reasonable visibility over forward Q4 bookings, we cannot rule out further cuts to airfares and/or slightly lower full-year guidance if there are unexpected Brexit or security developments which adversely impact yields between now and the end of March. As we are in a closed period, we will update shareholders in detail on these developments following our Q3 results release on Mon 4th Feb.”
