Turbulent times: Ryanair fares heading for 3pc annual fall, warn stockbrokers
Ryanair's fares in the current financial year are likely to fall 3pc, according to Goodbody Stockbrokers, which has predicted the carrier will now make a €778m profit after tax in the 12 months to the end of next March.
The projected fare decline is worse than that of up to 2pc forecast by the airline last week, while the Goodbody profit outlook is at the lower end of Ryanair's own expectations.
Releasing first-quarter results last week, Ryanair said it expected its profit after tax in the current financial year to be between €750m and €950m, a range unchanged from its previous guidance.
A report on the European low-cost airline sector published by Goodbody now warns Ryanair's revenue per passenger guidance for the full year relies on a "significant improvement" in the second half of the financial period, especially as fares in the first half of the year are guided to decline by 6pc.
Goodbody said that if fares fall by 2pc in the current year, and total revenue per passenger rises 2pc, that means fares in the second half would have to rise 7.2pc.
"However, with European school holidays falling in April 2020, this recovery looks too big an ask," said Goodbody.
It is now forecasting that Ryanair's fares in the year to the end of next March will fall by 3pc, implying a 3.7pc rise in second-half fares.