Ryanair profits up but firm warns of ‘Brexit developments’

The budget carrier is forecasting a profits rise of 8% for 2017-18
The budget carrier is forecasting a profits rise of 8% for 2017-18

Low cost carrier Ryanair pledged to continue cutting fares as it posted a 6% rise in annual profits despite intense competition and the Brexit vote.

CEO Michael O’Leary said the Irish airline faced “difficult” trading as the group posted profits of f1.31 billion (£1.14bn) for the year to March 31.

It slashed fares by 13% on average over the year amid competition in the industry and expects to reduce fares by a further 5 - 7% due to the weak pound and as it passes on lower fuel costs.

The group said the year was marred by terrorist attacks across Europe, confirming flight bookings fell in the aftermath of the explosion at the Manchester Arena last week.

Bookings have started to recover with the launch of seat sales in response to the fall in demand.

The group said it also saw “strong bookings” over the weekend after an IT failure hit rival British Airways.

Ryanair is “cautiously” forecasting profits to rise by 8% to between f1.4bn (£1.2bn) to f1.45bn (£1.3bn) for the year to next March.

“Investors should be wary of the risk of negative Brexit developments, or any repeat of last year’s security events at European cities, which could damage consumer confidence, close-in bookings, and this full year 2018 guidance,” Mr O’Leary said, adding that he would “continue to pivot our growth away from the UK” amid uncertainty caused by Brexit.

Ryanair reported a 13% rise in passengers, to 120 million in the year to March 31, but admitted it was impacted by delays due to air traffic control strikes and weather disruption at the end of last year.

The carrier, with 1,800 daily flights across 33 countries, is targeting 130 million passengers this year, suggesting a slowdown of around 8%.