Ryanair warns of further disruption amid move to union recognition
Ryanair is warning of further disruption and negative PR as it moves to union recognition.
It is also urging extreme caution on what will happen to its fares with Brexit uncertainty continuing to hang over the UK aviation industry.
Releasing its third quarter results today, the airline told investors it does not share the ‘optimism of competitors and market commentators’ for summer 2018 fare rises.
It said traffic will grow by 6% in the full year 2019 to 138 million but very early indications are that summer 2018 fares will remain under pressure.
"Costs will rise next year as our fuel bill increases by over €300m and a further €100m is added to staff costs (as up to 20% pilot pay increases annualise).
"The lack of clarity on Brexit continues to overhang fares and pricing on routes to/from the UK. We would, even at this early date, urge extreme caution on investor and analyst assumptions for fares in FY19. We will provide a more detailed FY19 guidance during our full-year results and investor roadshow in May 2018."
Despite a ‘very challenging’ quarter, Ryanair managed to achieve a 12% rise in third quarter profit to €106 million as average fares fell 4% to €32 per customer.
Traffic grew 6% to 30.4 million with load factors up 1% to 96%.
CEO Michael O’Leary said: "Following our pilot rostering failure in September the painful decision to ground 25 aircraft ensured that punctuality of our operations quickly returned to our normal 90% average.
"Our Always Getting Better customer service programme, coupled with 4% lower fares, stimulated 6% traffic growth to 30.4m at an industry leading 96% load factor."
On the move to union recognition, the airline said: "While union recognition may add some complexity to our business and may cause short-term disruptions and negative PR it will not alter our cost leadership in European aviation, or change our plan to grow to 200 million traffic a year by March 2024."
Ryanair said it remains concerned at the continuing uncertainty surrounding the terms of the UK’s proposed departure from the EU in March 2019.
"There remains a worrying risk of serious disruption to UK-EU flights from April 2019 unless a UK-EU bilateral, or transitional arrangement, is agreed in advance of September 2018," it said.
"We, like other airlines, need clarity on this issue before we publish our summer 2019 schedules in mid-2018 and time is running out for the UK to develop and agree these solutions.
"We believe the UK government continues to under-estimate the likelihood of flight disruptions to/from the UK."
‘¨Ryanair has applied to the UK CAA for a UK air operator’s certificate as a contingency plan.
"We expect this process to take several months but to be complete well in advance of September 2018," it said.
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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