Business

Ryanair profits down 20 per cent amid warning of hard Brexit future risks

Ryanair's first quarter profits have plunged 20 per cent to €319 million (£285m), with the fall blamed on lower fares, higher oil prices and pilot costs

RYANAIR'S first quarter profits have plunged 20 per cent to 319 million euro (£285 million), with the fall blamed on lower fares, higher oil prices and pilot costs.

The company's forecast for profit for the year remains unchanged at between €1.25 billion to €1.35 billion (£1.12bn-1.21bn), but it said this was "heavily dependent" on fares in the current quarter and "no negative Brexit developments".

Average fares are expected to be lower over the summer owing to the World Cup, the heatwave across northern Europe and uncertainly about pilot strikes, Ryanair said.

Like other airlines, Ryanair is being hit by air traffic control strikes in Europe, with carriers forced to pay compensation to customers over the disruption.

Last year, Ryanair was also forced to cancel hundreds of flights due to what it said were problems with pilots' rotas.

Critics claimed the real issue then was that disenchanted pilots were deserting the airline in droves.

That issue finally came to a head in December when chief executive Michael O'Leary recognised unions for the first time.

The airline has also been hit by pilot strikes in Ireland recently.

Mr O'Leary said on Monday: "Traffic grew 7 per cent to 37.6 million, despite over 2,500 flight cancellations caused by air traffic control staff shortages and strikes. "

The company said fuel prices have "risen substantially" from 50 dollars (£38) per barrel at this time last year to almost 80 dollars (£61) in the first quarter.

Staff costs increased by 34 per cent due to a 20 per cent increase in pilot pay, 9 per cent more flight hours and a 3 per cent general pay increase for non-flight staff, Ryanair added.

The company said it was concerned about the danger of a hard Brexit - and the risk of one was being "under-estimated".

The Irish carrier said: "While there is a view that a 21-month transition agreement from March 2019 to December 2020 will be implemented (and extended), recent events in the UK political sphere have added to this uncertainty, and we believe that the risk of a hard Brexit is being underestimated.

"It is likely that in the event of a hard Brexit our UK shareholders will be treated as non-EU.

"We may be forced to restrict the voting rights of all non-EU shareholders in the event of a hard Brexit, to ensure that Ryanair remains majority owned and controlled by EU shareholders."

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