Ryanair says strikes are hitting its profits


The low-fares airline blamed the 12pc cut in its guidance on a combination of lower passenger traffic in September, a reduction in forward bookings in its third quarter, and higher oil prices.

Europe's largest low-priced carrier has faced multiple strikes since it bowed to pressure to recognise trade unions for the first time last December.

Analysts at Bernstein said the cut was the latest indication that the "low-cost wins, legacy loses" story may be coming to an end after budget rival easyJet (EZJ.L) last Friday gave a cautious outlook for next year despite benefiting from Ryanair's woes.

Ryanair also said it cannot rule out further disruptions in the third quarter, which may require full year guidance to be lowered further and may necessitate further trimming of loss making winter capacity.

It has lowered the range €1.25bn-1.35bn (£1.1bn-1.2bn) to €1.1-1.2bn.

Ryanair said fares in its second quarter to September 30 had fallen by about 3 percent, compared with a 1 percent dip forecast previously, and said it now expects fares in the second half to fall by 2 percent.

Meanwhile the strike had led to higher costs to re-accommodate passengers - while at the same time the carrier has faced rising fuel costs with oil climbing to a near four-year high at more than $80 a barrel.

Ryanair also said today that like a number of other European Union airlines, it will trim its winter 2018 capacity by 1% in response to the lower fare, higher oil and higher cost environment.

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The airline said it could not rule out further disruption and another cut to forecasted profits.

"While we successfully managed five strikes by 25% of our Irish pilots this summer, two recent coordinated strikes by cabin crew and pilots across 5 European Union countries has affected passenger numbers (through flight cancellations), close in bookings and yields (as we re-accommodate disrupted passengers), and forward air fares into Q3", commented Ryanair's CEO Michael O'Leary.

"While we regret these disruptions, we have on both strike days operated over 90% of our schedule", Mr O'Leary said.

"However, customer confidence, forward bookings and Q3 fares has been affected, most notably over the October school mid-terms and Christmas, in those five countries where unnecessary strikes have been repeated", he added.

The company said Monday that it would close bases at Eindhoven in the Netherlands, and Bremen and Niederrhein in Germany on November 5.

However, it said most routes would either continue with remaining aircraft, or foreign and non-German aircraft.

"We will also now consult with our pilots and cabin crew at these three bases to minimise job losses".