Belfast Telegraph

Ryanair posts rise in profits but warns of 'Brexit developments'

Low cost carrier Ryanair pledged to continue cutting fares as it posted a 6% rise in annual profits despite intense competition and the Brexit vote.

Ryanair chief executive Michael O'Leary said the Irish airline faced "difficult" trading as the group posted profits of 1.31 billion euro (£1.14 billion) for the year to March 31.

It slashed fares by 13% on average over the year amid competition in the industry and expects to reduce fares by a further 5% to 7% due to the weak pound and as it passes on lower fuel costs.

The group said the year was marred by terrorist attacks across Europe, confirming flight bookings fell in the aftermath of the explosion at the Manchester Arena last week.

Bookings have started to recover as Ryanair has launched seat sales in response to the fall in demand.

The group said it also saw "strong bookings" over the weekend after an IT failure hit rival British Airways.

Ryanair is "cautiously" forecasting profits to rise by 8% to between 1.4 billion euro (£1.2 billion) to 1.45 billion euro (£1.3 billion) for the year to next March.

Mr O'Leary warned: "Investors should be wary of the risk of negative Brexit developments, or any repeat of last year's security events at European cities, which could damage consumer confidence, close-in bookings, and this full year 2018 guidance."

He added the group would " continue to pivot our growth away from the UK" amid uncertainty caused by Brexit.

Ryanair reported a 13% rise in passengers, to 120 million in the year to March 31, but admitted it was impacted by delays due to air traffic control strikes and weather disruption at the end of last year.

Its punctuality fell to 88% from 90% the previous year.

The Dublin-based carrier, which flies 1,800 daily flights across 33 countries, is targeting 130 million passengers over the year ahead, suggesting a slowdown in growth to around 8%.

While Ryanair's profits rose to another record high, the group took a hit from the weak pound since the Brexit vote as ticket sales in sterling are worth less in euros.

It warned over profits last October after fares fell more than expected, while airlines have also been knocked by a price war and a shift away from popular destinations Egypt and Turkey after terrorist attacks and political turmoil.

Kenny Jacobs, Ryanair's chief marketing officer, told BBC Radio 4's Today programme that no clarity had been offered by the Government over Brexit.

"They have indicated they will leave the European Court of Justice, that is the European institution that governs open skies, so Britain is going to leave open skies as it now stands," he said.

"We need to see clarity in terms of what is going to be the future of open skies, which will mean a new bilateral or not.

"If there isn't a new bilateral in place then you may have very restricted or no flying between Europe and the UK for a period.

"I think it's clear we're heading to what looks to be a very ugly divorce at the moment. Our call on the Government here is to please give us and other airlines clarity - every airline is saying the same."