Ryanair warns of Brexit threat to Open Skies as profits soar 55% to £356m
The airline sounded alarm bell on Britain’s divorce from the EU as Tory ministers scramble to strike an aviation deal before March 2019.
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.
However, the 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.
Ryanair said: “While we continue to campaign for the UK to remain in the EU Open Skies agreement, we caution that, should the UK leave, there may not be sufficient time, or goodwill on both sides, to negotiate a timely replacement bilateral which could result in a disruption of flights between the UK and Europe for a period of time from April ’19 onwards.
“If we do not have certainty about the legal basis for the operation of flights between the UK and the EU by autumn 2018, we may be forced to cancel flights and move some, or all, of our UK-based aircraft to Continental Europe from April ’19 onwards.”
Ryanair shares dipped nearly 3% to 17.6p in morning trading off the back of Mr O’Leary’s comments about pricing pressures and the fact that the carrier 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.”