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Bloomberg
Ryanair Holdings Plc joined a chorus of European carriers in warning that a fare war and weakening economies may hold back earnings this year.
Shares of the region’s biggest discount airline fell the most in six months on Monday as it posted a 39 percent drop in net income for the 12 months through March and said profit could tumble further.
European carriers are bracing for a tough summer as a glut of seats combines with stuttering economic growth and high fuel prices to
squeeze margins.
Market leader Deutsche Lufthansa AG has frozen capacity at its discount arm, while Thomas Cook Group Plc’s share price plummeted after analysts said the holiday firm’s debt now exceeds its value amid faltering demand.
Ryanair Chief Executive Officer Michael O’Leary said he’s “cautious†on prices this year, with zero visibility for the second half, which encompasses the winter season.
Ryanair said first-half bookings for the peak summer period are higher but that the earnings outcome will depend on last-minute fares and whether there’s any disruption from the UK leaving the EU. The fuel bill is set to swell by $513 million, slightly ahead of last year’s increase.