Mon, 29th Jul 2019
Ryanair has reported that it has seen a sharp drop in its quarterly profits for the three months leading up to the end of June, while the average price of a ticket fell by six percent. The airline is also facing higher costs for fuel and for staff.
Chief executive Michael O’Leary says that the two weakest markets are the UK and Germany. In Germany, Ryanair is facing fierce competition from other low cost carriers, while in the UK there are fewer people booking holidays because of Brexit uncertainty.
Lufthansa has acquired Air Berlin, and is selling its excess capacity at less than cost, which is making it difficult for Ryanair to compete in that territory.
Chief Executive O’Leary says that the current weak fare environment has pushed fares down by approximately six percent. This has been offset by an increase in ancillary revenue from food, baggage, and other fees, but overall the results are still weaker than hoped.
The airline is reportedly considering making changes to its schedule because of issues relating to the grounding of Boeing 737 Max aircraft. It confirmed, however, that it expects to have 30 new jets delivered in time for summer next year.
The forecast for their full-year profits remains unchanged, in spite of this recent quarterly drop. The airline is currently in talks with staff after pilots in the UK and Ireland threatened strike action, along with cabin crew in Portugal. It is unclear whether the airline will be able to avoid disruptions to services and avert the strikes.