Ryanair profits slide as fares drop

PanARMENIAN.Net - Ryanair has said its average fares fell faster than "initially planned" in the final three months of last year, while profits at the airline also declined, BBC News reports.

Average fares dropped 17%, and profits slid 8% to 95m euros as the fall in the pound also hit its results.

However, passenger numbers in the quarter rose 16% to 29 million, and its planes flew at 95% capacity.

Ryanair said it was "cautious" about the rest of the financial year, but profits would still meet expectations.

Ryanair's average fares were 33 euros per passenger in the October-to-December period, the third quarter of its financial year.

It said it was increasing capacity and adding new routes and bases at a time when other airlines were also adding capacity, and "accordingly the price environment remains weak".

Ryanair added that uncertainty following the Brexit vote, weaker sterling and the switch of charter capacity from Turkey, Egypt and North Africa into Spain and Portugal, would "continue to put downward pressure on pricing for the remainder of this year" and next.

It expects yields, or average fare per passenger per mile, in the fourth quarter to be down by 15%.

However, it said it was "maintaining its full-year profit guidance in the range of 1.30bn to 1.35bn euros".

In the next financial year it said it seemed clear that "pricing will continue to be challenging and we will respond to these adverse market conditions with strong traffic growth and lower unit costs".

"There's a huge amount of capacity which has migrated out of North Africa into the likes of Portugal and Spain," Ryanair chief financial officer Neil Sorahan told the BBC.

"That said, Ryanair is very focused on our costs and you would have seen in the quarter our unit costs, excluding fuel, were down 6% at a time when our competitors are actually seeing their costs rise.

"It's the reason we're making the kind of profits that we made... and why we're retaining our [profit] guidance."