Monday 20 February 2017

Ryanair sticks with profit guidance despite Brexit

Published 26/07/2016 | 02:30

Ryanair boss Michael O'Leary
Ryanair boss Michael O'Leary

Ryanair said it is sticking with official guidance for record breaking-profits this year despite challenges including the rising terror threat in Europe and the fallout from the Brexit vote.

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The Irish airline said it is on course to carry 117 million passengers in the 12 months to the end of next March, 10pc up on last year and ahead of previous guidance.

Earlier the company reported net profits in the three months to the end of June up 4pc to €256m. An 11pc jump in passenger numbers in the period helped offset a 10pc decline in ticket prices, according to a company.

The airline's chief financial officer, Neil Sorohan, said yesterday that in a "challenging market" the company has been actively cutting prices to keep passengers travelling.

"Ryanair's policy is to be load active yield passive, meaning that we always hit the passenger number and the fare is whatever the fare is going to be," he said.

So far, terror threats in Europe and the impact of a serious of air traffic controller strikes in France has not dampened demand for travel, he said.

He stood by full-year guidance, but admitted risks to the downside may see that change later in the year. Ryanair chief executive Michael O'Leary campaigned heavily for the UK to remain within the EU ahead of last June's Brexit referendum.

In the wake of the 'leave' vote Ryanair has indicated it will focus resources away from the UK market over time.

Britain is a major market for the airline, accounting for about a quarter of all sales.

In a trading update yesterday, the company said it was too soon to predict the full impact from the vote, which will depend on the regulator position for airlines flying between the UK and the remaining European Union members. However, the airline already plans some changes.

"In the meantime, we will pivot our growth away from UK airports and focus more on growing at our EU airports over the next two years.

"This winter we will cut capacity and frequency on many London Stansted routes (although no routes will close) where we are already significantly ahead of our multi-year traffic growth targets," the company said.

Its idea is to shift capacity and growth to markets including Poland, Romania, Lithuania and the Czech Republic as well as Italy and Germany.

Irish Independent

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