Ryanair profits to be hit by fall in pound

Ryanair has said its full-year profits will be lower than expected because of the sharp drop in the value of the pound since the Brexit vote in June.

The budget airline said an 18% fall in sterling since the referendum was the main reason it was downgrading its expectations for full-year profit growth, from 12% to to 7%.

Profits are now expected to be between €1.3bn (£900m) and €1.35bn. The Dublin-based company warned, however, that the outlook for profits would worsen in the event of a further drop in the pound or weakness in ticket prices.

Fares in the second half of the year are expected to fall by 13-15%, more than the 10-12% previously expected.

Michael O’Leary, the chief executive, said lower fares would be partially offset by cost savings, with costs expected to fall by 3% in the full year, more than the 1% given in previous guidance.

“The recent sharp decline in sterling will weaken second-half yields by slightly more than we had originally expected,” he said.

O’Leary is one of several senior business figures to criticise the government in recent weeks for a lack of clarity on its Brexit strategy.

“Whether the UK leaves the EU or stays, I couldn’t care less. The issue for us is whether we stay in the single market,” he said in September.

Powered by Guardian.co.ukThis article was written by Angela Monaghan, for theguardian.com on Tuesday 18th October 2016 08.01 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010

 

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