Ryanair's Post-Tax Profit Dropped 21% In Q2 2019
Ryanair has reported a 21% year-on-year post-tax profit decrease to €243 million for the second quarter of 2019. Fares fell 6% from the same period last year in a trend that the company said would...
Ryanair has reported a 21% year-on-year post-tax profit decrease to €243 million for the second quarter of 2019.
Fares fell 6% from the same period last year in a trend that the company said would continue until the end of the summer.
The key drivers were price competition in several markets, including Germany, and reduced spending by British consumers as the country prepares to leave the European Union.
"We are cautious on pricing into the winter," CEO Michael O'Leary told analysts in a conference call. "Brexit and the risk of a hard Brexit has materially increased with the new government.
"We do not share the kind of unbridled enthusiasm and optimism that was reported in recent weeks by Wizz and easyJet."
However, Ryanair stuck to its profit forecast of between €750 million and €950 million for the year that ends on March 31, 2020, saying that demand for optional extras such as pre-booked seats and on-board refreshments is strong.
O'Leary also said that there are concerns over further slippage in the return to service of Boeing's grounded 737 MAX.
Ryanair, one of the largest customers for the jet, has cut the number of 737 MAX jets it plans to fly next summer from 58 to 30, halving passenger growth for the year to five million passengers.
The number of MAX jets in service "could move to 10 and it could move to zero if Boeing don't [sort things out] pretty quickly with the regulator," O'Leary said.
Any further cuts would "significantly truncate" the company's growth rate, he added, though he emphasised his continued confidence in the aircraft and said customers would not be reluctant to fly in it once regulators give the jet the all-clear.
In recent weeks, Ryanair has also been hit by the threat of fresh strike action by pilots in the United Kingdom and Ireland, and cabin crew in Portugal.
O'Leary said that he does not expect staff disruptions, but he will not be making any concessions that would increase Ryanair's costs.
"It seems to us that even by the standards of some of these trade unions, this is chronically ill-timed and ill-judged," he said, adding that it could coincide with the period in which the company will be announcing base cuts, closures and job losses because of MAX delivery delays.