Ryanair profit warning after sharp drop in sterling
Ryanair has reduced its full year net profit guidance by 5%, blaming Brexit.
The airline is now expecting to achieve between €1.30bn and €1.35bn, compared to a previous range of €1.375bn to €1.425bn.
It said the main cause was the 18% drop in sterling after 52% of Brits voted to leave the European Union.
The pound fell below €1.10 for the first time since 2010 during trading on Monday.
Ryanair said the fall would reduce average fares by between 13% to 15% as opposed to the previously guided 10% to 12% in the second half of the financial year.
First half fares were marginally weaker, 10% down, compared to previously guided 9%, it explained.
"However, these lower fares will be partly offset by a better than expected cost performance," it said.
The airline now expects full year ex-fuel unit costs to drop by 3% compared to previously guided 1%.
It also expects full year load factor to be 1 percentage point better than guided at 94%, and now expects full year traffic will increase to 119 million – 12% up on last year’s 106 million passengers.
CEO Michael O’Leary said: "The recent sharp decline in Sterling post Brexit – which accounts for approximately 26% of Ryanair’s FY17 revenues – will weaken second half yields by slightly more than we had originally expected.
"We would caution that this revised guidance remains heavily dependent upon no further weakness in second half fares or sterling from its current levels."
He said Ryanair will continue to be ‘load factor active and price passive’ throughout the winter season.
Bev
Editor in chief Bev Fearis has been a travel journalist for 25 years. She started her career at Travel Weekly, where she became deputy news editor, before joining Business Traveller as deputy editor and launching the magazine’s website. She has also written travel features, news and expert comment for the Guardian, Observer, Times, Telegraph, Boundless and other consumer titles and was named one of the top 50 UK travel journalists by the Press Gazette.
Vegas’s Billion-Dollar Secrets – What They Don’t Want Tourists to Know
Visit Florida’s New CEO Bryan Griffin Shares His Vision for State Tourism with Graham
Chicago’s Tourism Renaissance: Graham Interviews Kristin Reynolds of Choose Chicago
Graham Talks with Cassandra McCauley of MMGY NextFactor About the Latest Industry Research
Destination International’s Andreas Weissenborn: Research, Advocacy, and Destination Impact
Graham and Don Welsh Discuss the Success of Destinations International’s Annual Conference
Graham and CEO Andre Kiwitz on Ventura Travel’s UK Move and Recruitment for the Role
Brett Laiken and Graham Discuss Florida’s Tourism Momentum and Global Appeal
Graham and Elliot Ferguson on Positioning DC as a Cultural and Inclusive Global Destination
Graham Talks to Fraser Last About His England-to-Ireland Trek for Mental Health Awareness
Kathy Nelson Tells Graham About the Honour of Hosting the World Cup and Kansas City’s Future
Graham McKenzie on Sir Richie Richardson’s Dual Passion for Golf and His Homeland, Antigua
ADS PRO 
Higher departure tax and visa cost, e-arrival card: Japan unleashes the fiscal weapon against tourists
Singapore to forbid entry to undesirable travelers with new no-boarding directive
Euromonitor International unveils world’s top 100 city destinations for 2025
U.S.A. and Israel attacks on Iran impact air movements in the Gulf (Update 1.00pm CET)
Global tourism exceeds 1.5 billion travelers announces UN-Tourism