Ryanair lining up record profits despite flight cancellation fiasco
RYANAIR remains on track to land record annual profits - despite facing lower passenger growth and pilot costs of up to €100 million (£88 million) following its flight cancellation fiasco.
The budget airline stuck by its full-year profit guidance of between €1.40 billion (£1.23 billion) and €1.45 billion (£1.28 billion), but warned that passenger numbers would slow in the wake of the pilot rostering debacle.
The Dublin-based firm said full-year traffic was now expected to decelerate from 131 million customers to 129 million after it grounded 25 aircraft.
Ryanair has been hit with fierce criticism after 700,000 customers suffered when the airline cancelled 20,000 flights stretching from September to March next year due to an error over pilot holiday rosters.
It included the carrier suspending flights from Belfast International to London Gatwick by flying 25 less aircraft of its 400 fleet from November and 10 fewer aircraft of 445 from April.
The low-cost carrier said efforts were now under way to increase pilot pay by a fifth after poor planning decisions had led to a "perfect storm" of pilot shortages.
It came as Ryanair gave an update on its half-year performance, with pre-tax profits climbing 11 per cent to €1.293 billion (£1.139 billion), up from €1.168 billion (£1.029 billion) over the period last year.
The jump was driven by a strong Easter period, helping bolster customer numbers by 11 per cent to 72.1 million.
Shares were up more than 6 per cent to €16.84 euro in afternoon trading.
Chief executive Michael O'Leary said: "These strong first half results reinforce the robust nature of Ryanair's low fare, pan-European growth model, even during a period which suffered a material failure in our pilot rostering function in early September."
Revenues picked up 7 per cent to €4.425 billion (£3.899 billion) for the half year, as it added 80 new routes and drove down air fares by 5 per cent.
However, it said costs in its "sales, marketing and other" bracket rose 30 per cent, as it forked out €25 million (£22 million) to compensate customers.
Neil Wilson, ETX Capital's senior market analyst, said: "More passengers, lower fares and on course for another record profit - investors might be wondering what all the fuss was about in the wake of September's cancellation fiasco.
"But beneath the rising revenues and passengers there are concerns about rising labour costs that will affect Ryanair's unit cost advantage over peers."
Airlines have endured a turbulent period in recent months, with a string of European carriers - Monarch Airlines, Air Berlin and Alitalia - going bankrupt.
Ryanair said it was poised to capitalise on the pressures facing the wider industry by growing its presence in Germany and Italy and adding more aircraft to "take up any slack" created by the demise of Monarch.