Low-cost airline carrier Ryanair have posted a quarterly loss of £17.2m, citing European competition and the risk of a no deal Brexit being “worryingly high”.
The budget airline fell into the red for the three months to the end of December, compared to a profit of €105.6m (£92.4m) in the same period a year ago.
It argued that a recent fall in oil prices would do nothing to lift the gloom – as it would help failing rivals stagger on in an already-overcrowded market, helping to keep prices low.
The third-quarter loss came despite passenger numbers growing by 8% to 30.4 million and revenues climbing 9% to €1.53bn (£1.34bn). Shares in the company fell 3% based on the results.
Michael O’Leary said that the results were “disappointing”.
“While a €20m loss in Q3 was disappointing, we take comfort that this was entirely due to weaker than expected air fares so our customers are enjoying record low prices, which is good for current and future traffic growth.”Michael O’Leary
Average fares fell 6% “due to excess winter capacity in Europe” while there were also higher staff costs including 20% pilot pay increases and more passenger compensation due to air traffic control disruption.
Ryanair’s third-quarter results come weeks after it warned that full-year profits would be hit by the squeeze on fares. The airline reiterated the same guidance in its latest release, saying it expects full-year profits of €1bn – €1.1bn (£880m-£960m), excluding its recently acquired loss-making Austrian carrier Laudamotion.
O’Leary went on further to discuss Brexit and how the outcome will affect his airlines business performance.
The risk of a no-deal Brexit remains worryingly high. While we hope that common sense will prevail, and lead either to a delay in Brexit, or agreement on the 21-month transition deal currently on the table, we have taken all necessary steps to protect Ryanair’s business in a no-deal environment.”Michael O’Leary
Ryanair has already obtained a UK licence to protect domestic routes and has also temporarily made changes to its share voting rights structure so that it remains an EU owned and controlled business.
The airline also announced a shake-up of its structure and that Mr O’Leary has agreed a new five-year contract as chief executive to take him through to July 2024.