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Ryanair warns over profits as strikes and oil price take toll

Ryanair warns over profits as strikes and oil price take toll

2018 10 01

2018 10 01

* Airline to close bases in Eindhoven and Bremen, but says most routes will continue

 

Ryanair has warned that full-year profits will be lower than expected, blaming the impact of strikes and rising oil prices.

The budget airline said full-year profits will be 12% down. It has lowered the expected range from €1.25bn-€1.35bn (£1.1bn-£1.2bn) to €1.1bn-€1.2bn.

It said it suffered a drop in traffic due topilot and cabin crew strikes in September, which hit consumer confidence and knocked forward bookings in the third quarter. Ryanair also cited higher oil prices.

Its chief executive, Michael O’Leary, said: “While we successfully managed five strikes by 25% of our Irish pilots this summer, two recent co-ordinated strikes by cabin crew and pilots across five EU countries has affected passenger numbers (through flight cancellations), bookings and yields (as we re-accommodate disrupted passengers), and forward air fares into Q3.

“While we regret these disruptions, we have on both strike days operated over 90% of our schedule.

“However, customer confidence, forward bookings and Q3 fares have been affected, most notably over the October school midterms and Christmas, in those five countries where unnecessary strikes have been repeated.”

Ryanair added that it has now cut its capacity for winter 2018 by 1% in response to the additional pressures.

Starting from 5 November, it will close its four-aircraft Eindhoven base, its two-aircraft Bremen base and cut its its five-aircraft Niederrhein base to three.

However, it said most routes would continue. “All affected customers have been contacted by email/SMS this morning and will be re-accommodated on other flights or refunded as they so wish,” Ryanair said.

“We will also now consult with our pilots and cabin crew at these three bases to minimise job losses. We expect to offer our pilots vacancies at other Ryanair bases but, as we have a large surplus of winter cabin crew, we will explore unpaid leave and other options to minimise cabin crew job losses.”

Ryanair shares were down 7.5% in early trading.

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