 has warned that full-year profits will be lower than expected. Blaming the strikes and rising oil prices, the budget airline has said){kind=link}
Ryanair (LON: RYA) has warned that full-year profits will be lower than expected.
Blaming the strikes and rising oil prices, the budget airline has said it expects full-year profits to be down 12 percent.
The expected range of profits has been lowered from €1.25 billion – €1.35 billion (£1.1 billion – £1.2 billion) to €1.1 billion – €1.2 billion.
The group’s bookings have been affected by a large number of strikes, which have affected consumer confidence.
“While we successfully managed five strikes by 25 percent of our Irish pilots this summer, two recent co-ordinated strikes by cabin crew and pilots across five EU countries has affected passenger numbers (through flight cancellations), bookings and yields (as we re-accommodate disrupted passengers), and forward airfares into Q3,” said Ryanair’s chief executive, Michael O’Leary.
“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 have been affected, most notably over the October school midterms and Christmas, in those five countries where unnecessary strikes have been repeated.”
Last week, cabin crew and pilots working for Ryanair in Holland, Belgium, Spain, Portugal and Germany took part in strikes, which led to widespread flight cancellations.
David Madden, an analyst at CMC Markets, said: “In August 2017 the airline’s share price hit an all-time high as the company made a concerted effort to improve customer service prior to that, and it clearly paid off.”
“Clients like cheap airfares, but they value flight certainty more, and the company is running the risk of doing long-term damage to the brand. The airline is still aiming to make over €1 billion profit, so it’s not like they can’t afford to pay their staff well.”
Shares in the group opened down 7.5 percent in early trading.