Ryanair: what’s going on? Profit warnings, low growth and customer service are not what we expect

Ryanair saw its 1HFY2014 net profit increase, reversing the decline posted in 1Q. Indeed, its 2Q profit was its highest ever quarterly result. The quarter saw an increase in average fares, strong growth in ancillary revenues and a fall in sector length-adjusted costs per passenger. However, Ryanair also gave its second profit warning in two months, a reflection of what it sees as a weak fares outlook across Europe.

For an airline that saw compound average growth in passenger numbers of 18% per annum in the 10 years to FY2013, does planned growth of 2% in FY2014 and 3% in FY2015 mean that opportunities are drying up?

Announcing a return to allocated seating and a host of customer service initiatives and product enhancements, is Ryanair moving away from the purist LCC model?