Ryanair warns over Brexit impact as profits soar 55% to £356m
Low-cost carrier Ryanair has posted a jump in first-quarter profits, but again warned that Brexit could cause it to ground flights and cancel holidays unless a deal with the EU is struck.
The airline posted a 13% rise in revenue to 1.9 billion euros (£1.7 billion) in the three months to June 30, while profits soared 55% to 397 million euros (£356 million).
Ryanair was boosted by the timing of Easter, and saw a 12% rise in customer numbers to 35 million.
Average fares rose 1% in the period, but it expects fares to fall by 5% in the first six months of the year and by 8% in the second amid tough competition in the sector and as Ryanair passes on lower fuel costs.
"We expect the pricing environment to remain very competitive," boss Michael O'Leary said.
Ryanair's chief financial officer Neil Sorahan insisted the airline is "never that worried per se about fares".
He told a central London press conference: " We're what we call load active yield passive, which means we'll always hit the passenger target and the market more or less dictates what they're going to pay for those seats."
By maximising passenger numbers the airline can achieve discounts in airport fees, spread its fixed costs among more customers and sell more ancillary products such as on-board drinks, car hire and accommodation, Mr Sorahan said.
He added: "We will happily trade away fares to drive the other elements of the business and as you can see we're growing quite profitably."
Th e group again sounded the alarm bell on Britain's divorce from the EU as Tory ministers scramble to strike an aviation deal with the EU before March 2019.
It said it may be forced to cancel flights and move some of its UK-based aircraft to Continental Europe from April 2019 if there is no certainty about the legal basis of flights between the UK and the EU by autumn next year.
Mr Sorahan warned that the chances of the UK remaining in the EU Open Skies agreement - through which there are no commercial restrictions for airlines flying within the EU - appear "narrower by the day".
He went on: "Ryanair will clearly work in the best interests of our shareholders and customers to ensure we capitalise on all opportunities that are in the market.
"We're working hard with the various interest groups in Europe and in the UK to try and get people to start moving this along at a pace that makes sense because the clock is ticking down."
Ryanair also announced that it has submitted a non-binding offer for struggling Italian flag-carrier Alitalia.
The airline went into administration in May for the second time in a decade.
Mr Sorahan said: "Like a number of other airlines, we put in a non-binding offer."
Ryanair shares dipped nearly 3% to 17.6p in morning trading off the back of the Dublin-based carrier's comments about fares and the fact that it is seeing lower bag revenue.
Neil Wilson, senior market analyst at 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."