4th Sep 2013 07:16
LONDON (Alliance News) - Ryanair Holdings PLC Wednesday issued a profit warning, saying that it now expects full-year net profit to be at the bottom end of its guidance as yields have again dipped as fares come under pressure.
The company blamed price competition as airlines added capacity in the UK, Scandinavia, Spain and Ireland. It also said travellers were feeling the continued impact of austerity measures and the economic weakness, and it was also hit by a weaker sterling-euro exchange rates.
Fares and yields were being pressured into September, October and November, it said.
Europe's largest low-cost carrier had previously experienced a dip in yields in July as warm weather kept potential travellers at home, but said the situation had improved in August.
It said full-year net profit would now be at the lower end of its guidance for between EUR570 million and EUR600 million, and if fares and yields continue to fall over the winter, then profits could even fall below the range.
The airline said it would respond by cutting its own winter season capacity on selective routes. As a result, it now expects to fly under 81 million passengers in its current financial year, down from a previous forecast of 81.5 million.
"We are also rolling out a range of lower fares and aggressive seat sales particularly in those markets mainly UK, Scandinavia, Spain and Ireland," Chief Executive Michael O'Leary said in a statement.
It said it wouldn't change its plan to buy back at least EUR400 million of shares this financial year and to pay out up to EUR600 million through dividends and buybacks in its 2015 financial year.
Ryanair's shares were down 142% at EUR5.820 early Wednesday.
By Steve McGrath; [email protected]; @SteveMcGrath1
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