Ryanair says third quarter profits up but warns of possible disruption, lower fares

  • Ryanair reiterated its forecast that it would make a profit after tax of between 1.4 billion euros and 1.45 billion euros in its financial year, which ends on March 31, 2018.
  • Ryanair warned of possible further disruption in the months ahead and said it was not optimistic about average fares in European short-haul in the summer.

Ryanair posted an increase in profit of 12 percent in the three months to the end of December despite widespread disruption caused by the airline's relations with its pilots.

But it warned of possible further disruption in the months ahead and said it was not optimistic about average fares in European short-haul in the summer.

Ryanair planes on the tarmac in Stansted, U.K.
Simon Dawson | Bloomberg | Getty Images
Ryanair planes on the tarmac in Stansted, U.K.

The budget carrier in September announced thousands of flight cancellations due to a shortage of standby pilots and then narrowly averted Christmas strikes with a shock last-minute decision to recognise unions.

Average fares in the final three months were in line with forecasts, falling 4 percent, but ancillary revenue for optional extras such as extra bags and priority boarding rose 12 percent.

Profit after tax for the quarter was 106 million euros ($132 million), up 12 percent from a year ago and ahead of a consensus forecast of 101 million euros in a Ryanair poll of analysts.

Ryanair reiterated its forecast that it would make a profit after tax of between 1.4 billion euros and 1.45 billion euros in its financial year, which ends on March 31, 2018.

But Chief Executive Michael O'Leary warned analysts against assuming that recent strong performance by European short-haul carriers would continue into the key summer trading period.

Rivals easyJet and Wizz have reported a boost in sales in the same period as the collapse of Britain's Monarch and the entry of Air Berlin as well as Alitalia into administration has helped lift fares.

"We do not share the optimism of competitors and market commentators for summer 2018 fare rises," O'Leary said in a statement.

"We would, even at this early date, urge extreme caution on investor & analyst assumptions for fares" in the year to March 2019.

O'Leary also said he expected that negotiations with unions about pilot conditions would lead to "some localised disruptions and adverse PR".

"We are fully prepared to face down any such disruption if it means defending our cost base or our high productivity model," he said.