Ryanair posts loss amid winter competition

Ryanair posts loss amid winter competition

A six percent drop in fares plunged Ryanair to its first quarterly loss since 2014 and Europe's biggest budget airline said overcapacity was likely to continue driving ticket prices lower, albeit at a slower pace.

But the airline said "excess winter capacity in Europe" cut its profit.

In the quarter to 31 December 2018 passenger numbers grew eight per cent to 32.7m and revenue grew nine per cent to €1.53bn. Ancillary revenues, which include inflight sales, reserved seating, priority boarding and vehicle hire, climbed by 26% but this was offset by higher fuel, staff and customer compensation costs following strikes.

Over the same period past year it made a €106m profit after tax.

Shares fell 4.9 per cent in early morning trading.

But Ryanair repeated it is not ruling out further cuts to its guidance "especially if there are unexpected Brexit and/or security developments which adversely impact fares for close-in bookings between now and the end of March".

Meanwhile, chairman and company veteran David Bonderman will lead the board until summer 2020, but will not put himself up for reselection.

Mr O'Leary, who has been chief executive for 24 years, told the same annual meeting he had concerns about committing to a contract of that length, telling shareholders: "I'm not sure Mrs O'Leary would be happy".

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A significant amount of this loss was down to start-up costs associated with Laudamotion, the Austrian-based airline it recently took 100 percent control of.

It said that in order to ensure a smooth succession, Stan McCarthy who joined the Ryanair board in May 2017, will take up the position of Deputy Chairman from April, and will transition to chairman in summer 2020.

The carrier said it "did not share the recent optimistic outlook of some competitors that summer 2019 air fares will rise".

It reiterated today that it could not rule out a further downgrade.

Ryanair said the risk of a no-deal Brexit was "worryingly high".

"While we hope that common sense will prevail, and lead either to a delay in Brexit, or agreement on the 21-month transition deal now on the table, we have taken all necessary steps to protect Ryanair's business in a no-deal environment". The key appointment he said, would be getting a new CEO to run the main Ryanair airline.

"In our view, Ryanair remains the long-term victor in the European airline industry, based on its leading market position, extensive network, low unit costs and strong balance sheet", said analysts at stockbroker Liberum in a note to investors.

His role will change slightly as he will oversee and manage chief executives for each airline brand: Ryanair, Laudamotion, Ryanair Sun and Ryanair UK.

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