Ryanair cuts profit outlook

Ryanair has cut its full-year profit guidance by 12 percent, blaming higher oil prices, strikes and weaker fares. The low-cost carrier had predicted it would make a profit of between €1.25bn and  €1.35bn,  in the 2019 financial year but now says it will be from  €1.10bn  to €1.20bn. It blamed lower traffic and weaker fares caused by two days of coordinated industrial action in Germany, Holland, Belgium, Spain and Portugal as well as the ongoing impact on customer confidence of strike threats. The strikes had also resulted in higher costs due to European Union rules for delayed and canceled flights. READ Major US carriers join the rush to boost checked bag fees. Adding to this was the increased cost of about 10 percent of fuel which remained unhedged and a fuel bill now expected to be €460m higher than last year. “While we successfully managed five strikes by 25 percent of our Irish pilots this summer, two recent coordinated strikes by cabin crew and pilots across five EU countries has  affected passenger numbers (through flight cancellations), close in bookings and yields (as we re-accommodate disrupted passengers), and forward airfares into Q3,'' Ryanair boss Michael O'Leary said. "While we regret these disruptions, we have on both strike days operated over 90 percent of our schedule. "However, customer confidence, forward bookings and Q3 fares has been affected, most notably over the Oct school mid-terms and Christmas, in those five countries where unnecessary strikes have been repeated.'' The airline had expected stronger third-quarter fares but said it was now predicting send-half fares would be down 2 percent as opposed to its previous prediction that they would remain flat. Ryanair also announced it would trim its winter 2018 capacity by about 1 percent. The cuts will take effect from Monday, November 5 and will see the closure of bases in Eindhoven and Bremen. However, most routes to the two destinations would continue to be serviced by overseas or non-German aircraft, Ryanair said. Ryanair recognized unions in 2017 but staff in a number of countries have complained about the company work practices based on Irish contracts and law.