Belfast Telegraph

Rising oil prices and Brexit could take the shine off Ryanair profits

By Michelle Weir and PA

Ryanair, which has bases at Belfast International Airport and City of Derry Airport, has booked a solid increase in full-year profits, but warned that rising oil prices could take the gloss off its performance over the next 12 months.

The budget carrier, which flies to 12 destinations from Belfast International and three from City of Derry Airport, saw a 10% rise in post-tax profit to €1.45bn (£1.26bn) in the 12 months to March 31, while revenue jumped 8% to €7.15bn (£6.25bn).

The airline has been operating from Belfast International since 2016, flying to destinations including London Stansted and Manchester in the UK.

It also flies to other destinations further afield, including Malta, Poland and Spain.

Ryanair's existing route from City of Derry Airport to Glasgow International Airport will switch to Edinburgh Airport from October 28.

Passenger numbers across the airline's network were also up, jumping 9% to 130.3m on the back of falling average air fares, which were down 3% to 39.40 euros.

Ryanair has blamed air passenger duty (APD), the £13 tax on all departing passengers aged 16 or over, for its decision to pull out of Glasgow.

The solid figures came despite what Ryanair described as a "rostering management failure", when it was forced to cancel flights after mismanaging pilots' annual leave.

The September debacle, which affected 700,000 passengers, came alongside pilot strike action.

Ryanair boss Michael O'Leary said: "We are pleased to report a 10% increase in profits, with an unchanged net margin of 20%, despite a 3% cut in air fares, during a year of over-capacity in Europe, leading to a weaker fare environment, rising fuel prices, and the recovery from our September 2017 rostering management failure."

However, the chief executive also struck a cautious tone over the airline's prospects for the coming financial year, pointing to higher oil prices and Brexit.

Ryanair expects unit costs over the next year to rise by 9% following the surge in oil prices, which have risen to $80 per barrel.

It will add more than €400m euros to the group's costs (£349m).

Staff costs will rise by almost $200m euros (£174m).

The net result will be a fall in profits to between €1.25bn and €1.35bn euros, Ryanair said.

On Brexit, the Irish carrier again said it continues to plan for a hard Brexit in March 2019.

In that scenario, UK shareholders will be treated as non-EU and this could "potentially affect Ryanair's licensing and flight rights".

As a result, Ryanair intends to "restrict the voting rights of all non-EU shareholders in the event of a hard Brexit", in order to ensure it is majority-owned and controlled by EU shareholders at all times.

"This would result in non-EU shareholders not being able to vote on shareholder resolutions.

"In the meantime, we have applied for a UK AOC which we hope to receive before the end of 2018," the firm added.

Belfast Telegraph

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