Profits up at Ryanair, but Carrier’s Outlook Remains Cautionary

Despite a hike in pre-tax earnings and passenger figures, the airline warns that the outlook may not be so rosy.

Things may be looking up at Ryanair, but the carrier has cautioned that, despite the announcement of very positive first quarter results, profit margins may drop as fares are predicted to decline for the rest of 2017.

The IBTimes reports that the low-cost carrier earned a pre-tax profit of €397 ($463) million in the three months through to the end of June 2017. This amounted to a 55 percent year-on-year increase in earnings. Ryanair has forecasted that earnings for this financial year will be in the region of between €1.4 ($1.63) and €1.45 ($1.69) billion, which is slightly above the €1.32 ($1.54) billion reported last year.

Passenger figures are also up, with the year-on-year numbers having increased by 12 percent to 35 million.

Ryanair boss Michael O’Leary praised the results, but his outlook is cautionary. A late Easter, he explained, appeared to skew the carrier’s performance. Despite a one percent increase in fares, he warned that fares will drop by about five percent in the summer period due to over capacity.

As ever, the uncertainty of a post-Brexit world has cast doubt over the future of the carrier’s operations.

In an official statement, Ryanair said, “We remain concerned at the uncertainty which surrounds the terms of the UK’s departure from the EU in March ’19. While we continue to campaign for the UK to remain in the EU Open Skies agreement, we caution that should the UK leave, there may not be sufficient time, or goodwill on both sides, to negotiate a timely replacement bilateral which could result in a disruption of flights between the UK and Europe for a period of time from April ’19 onwards.”

“If we do not have certainty about the legal basis for the operation of flights between the UK and the EU by autumn 2018, we may be forced to cancel flights and move some, or all, of our UK based aircraft to Continental Europe from April ’19 onwards,” it added.

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