Ryanair says profits down more than a quarter
The company has delayed delivery of Boeing 737 MAX aircraft.
Shares in Ryanair have taken a battering after the airline unveiled a hit to profits amid turbulence in the aviation industry.
The group’s full year profits have fallen 29% to 1.02 billion euros (£890 million).
The company saw traffic growth of 7% and a decline in fares of 6% in the year to March 31 2019.
Revenues at the low-cost airline grew 6% to 7.56 billion euros (£6.6 billion) over the same period.
Shares in the firm were down 4.4% to 10.33 euros in early trading.
Michael O’Leary, chief executive of Ryanair, said he is expecting “broadly flat group profits” into the financial year ending in 2020 – when their reporting will include Lauda in the consolidated Ryanair Group – but this is dependent on “no negative Brexit developments”.
We continue to have utmost confidence in these aircraft Michael O'Leary on the Boeing 737-MAX
The company said: “Assuming revenue per passenger (RPP) growth of 3%, we are guiding broadly flat Group profits.
“This will range from 750 million euros (£660m) if RPP rises 2%, up to 950 million euros (£830m) if RPP rises 4%.
“This guidance is heavily dependent on close-in peak summer fares, H2 prices, the absence of security events, and no negative Brexit developments.”
Russ Mould, investment director at AJ Bell said rising costs in the wider airline sector were impacting the company.
“Times are tough for the travel industry,” he said.
“Brexit is affecting consumer sentiment, appetite for travel and the operating environment for the airlines themselves. If that weren’t enough, oil prices are on the rise and excess capacity is adding to the pressure on profitability.”
The company also said it had delayed the delivery of five Boeing 737-Max aircraft until winter – with no meaningful cost benefit from the delivery expected until the financial year ending in 2021.
It said: “We continue to have utmost confidence in these aircraft which have 4% more seats, are 16% more fuel efficient and generate 40% lower noise emissions.”
Two Boeing 737-Max aircraft crashes – one in Ethiopia in March and another in Indonesia in October – killed 346 people, leading to the aircraft being temporarily grounded.
Michael O’Leary, chief executive of Ryanair, said: “As previously guided, Ryanair (excluding Austrian low-cost airline Lauda) reports a full year after tax profit of 1.02 billion euros (£890 million).
“Short-haul capacity growth and the absence of Easter in Q4 led to a 6% fare decline, which stimulated 7% traffic growth to over 139 million (142 million guests including Lauda).
“Ancillary sales performed strongly up 19% to 2.4 billion euros (£2.1 billion), which drove total revenue growth of 6% to 7.6 billion euros (£6.6bn).”
The board of the company has also approved a 700 million euro (£610 million) share buyback which will commence later this week and run over the next year.