Ryanair lowers FY2019 profit guidance due to lower than expected winter fares

Ryanair reported (18-Jan-2019) the following operational highlights and full year profit guidance for FY2018/19 (excluding Laudamotion):

• Lowered profit guidance of EUR1 billion to EUR1.1 billion due to factors including lower winter fares (expected to fall 7%), stronger traffic growth (up 9% to 142 million), stronger ancillary sales and slightly better than expected 2HFY2019 unit cost performance;
• Ryanair and Laudamotion to report stronger than expected traffic growth, improving ancillary revenue performance and strong unit cost discipline for winter 2018/19, which will assist to defray the impact of lower than expected winter fares;
• Boost to market share due Norwegian's recent announcement of its plans to close bases in Rome, Gran Canaria, Tenerife and Palma, where it competed with Ryanair.

Ryanair CEO Michael O'Leary said: "While we are disappointed at this slightly lower full year guidance, the fact that it is the direct result of lower than expected H2 air fares, offset by stronger than expected traffic growth, a better than expected performance on unit cost and ancillary sales is positive for the medium term. There is short haul over capacity in Europe this winter, but Ryanair continues to pursue our price passive/load factor active strategy to the benefit of our customers who are enjoying record lower air fares. We believe this lower fare environment will continue to shake out more loss making competitors, with WOW, Flybe, and reportedly Germania for example, all currently for sale". [more - original PR]