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Bloomberg
Ryanair Holdings Plc shares dropped to a four-year low after the airline cut its full-year profit guidance, citing an industrywide slump in ticket prices and over-capacity across Europe this winter.
The region’s biggest discount airline now expects an after-tax profit in the range of $1.1 billion to 1.1 billion euros, excluding its new Lauda unit, for the year through March compared with 1.1 billion euros to 1.2 billion euros previously, it said.
Earnings have been hurt by lower winter fares, which are expected to fall 7 percent
instead of 2 percent as previously guided.
That’s offsetting the impact of higher passenger numbers, cost improvements and stronger sales of optional items. Ryanair’s battle with unions, bad weather and air-traffic-control strikes has also taken a toll, with passenger growth lagging well behind rival Wizz Air Holdings Plc, which poses an increasing threat.
The Irish company’s CEO Michael O’Leary said he’s “disappointed†with the lower guidance. Investors will be upset, too.
Ryanair previously cut its fiscal 2019 profit guidance by 12 percent only in October, citing labour strife and fuel costs.
The low fares will “continue to shake out more loss making competitors,†citing potential sales of Wow, Flybe and possibly Germania, the CEO said.