Ryanair still set to land record profits despite pilot rostering fiasco
PUBLISHED: 23:21 31 October 2017 | UPDATED: 23:21 31 October 2017
Ryanair remains on track to land record annual profits, despite facing lower passenger growth and costs of up to 100m euros (£88million) following its flight cancellation fiasco.
The budget airline stuck by its full-year profit guidance of between 1.40bn euros (£1.23bn) and 1.45bn euros (£1.28bn), but warned that growth in passenger numbers would slow in the wake of the pilot rostering debacle.
The Dublin-based firm, which has its main UK base at Stansted, said full-year traffic was now expected to decelerate from an expected 131 million customers to 129m after it grounded 25 aircraft.
Ryanair has been hit with fierce criticism after 700,000 customers suffered when the airline cancelled 20,000 flights stretching from September 2017 to March next year due to an error over pilot holiday rosters.
The low-cost carrier said efforts were now under way to increase pilot pay by a fifth after poor planning decisions had led to a “perfect storm” of pilot shortages.
It came as Ryanair gave an update on its half-year performance, with pre-tax profits climbing 11% to 1.293bn euros (£1.139bn), up from 1.168bn euros (£1.029bn) over the same period last year.
The increase was driven by a strong Easter period, helping bolster customer numbers by 11% to 72.1m.
Chief executive Michael O’Leary said: “These strong H1 results reinforce the robust nature of Ryanair’s low fare, pan-European growth model, even during a period which suffered a material failure in our pilot rostering function in early September.”
Revenues increased by 7% to 4.425bn euros (£3.899bn) for the half year, as Ryanair added 80 new routes during the period and drove down air fares by 5%.
However, it said costs in its “sales, marketing and other” bracket rose 30%, as it forked out 25m euros (£22m) to compensate customers.
Airlines have endured a turbulent period in recent months, with a string of European carriers, including Monarch Airlines, Air Berlin and Alitalia, going bankrupt.
Ryanair said it was poised to capitalise on the pressures facing the wider industry by growing its presence in Germany and Italy and adding more aircraft to “take up any slack” created by the demise of Monarch.