Ryanair reports record profit despite roster crisis
Ryanair has reported record annual profits but has warned that its outlook for this financial year is ‘on the pessimistic side of cautious’.
Profit rose 10% in the year to March 13 to €1.45 billion (£1.27bn) while revenue rose 8% to €7.15 billion.
Passenger numbers jumped 9% to 130 million and average fares fell by 3% to €39.40.
Chief executive Michael O’Leary said he was pleased with the results which were achieved despite overcapacity in Europe, a weaker fare environment, rising fuel prices, and the rota crisis last autumn which forced Ryanair to cancel around 20,000 flights.
Ryanair said the pay rises triggered by the rostering issues, along with rising fuel prices, would push up costs next year.
It said this would lead to a drop in profits, with the airline predicting a range of €1.25bn to €1.35bn but warning that its forecast was ‘heavily dependent’ on maintaining fares, no security incidents, and no negative Brexit developments during the year.
“Our Outlook for FY19 is on the pessimistic side of cautious. We expect to grow traffic by 7% to 139 million, at flat load factors of 95%,” said O’Leary.
“Unit costs this year will rise 9% due to higher staff and oil prices which will, when adjusted for volume growth, add more than €400m to our fuel bill.
“Ex-fuel unit cost will rise by up to 6% as we annualise pilot and cabin crew pay increases, and invest in our business and our systems to facilitate a six-year growth plan to 600 aircraft and 200 million guests per annum.”
Commenting on the results, Fiona Cincotta, senior market analyst at City Index, said: "This pessimistic outlook statement contrasts markedly with more upbeat guidance on profits and fares provided by competitor EasyJet.
"Ryanair may have been able to weather last year’s rostering debacle with a record annual profit. However, industrial relations issues have lingered, creating a lasting hangover that has pushed up staff costs that will eat into this year’s earnings.
"Overall, though, the company appears to be making solid progress hammering out pay deals with pilots and cabin crew.
"The shares may well take a knock today, but don’t forget that Ryanair remains the most competitive player in the business. Don’t be surprised if it beats its more cautious targets later in the year.”
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.
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