Published: Tue, February 06, 2018
Markets | By Erika Turner

Rising traffic boosts Ryanair's third quarter profits

Rising traffic boosts Ryanair's third quarter profits

Ryanair has lost some of its mojo after the failures on pilot rostering: earlier this month it lost its title as Europe's biggest airline by passenger numbers.

Pre-tax profits were also up from €106m to €113m. That followed a row over pilots' rotas which saw thousands of flights cancelled.

On the move to union recognition, the airline said: "While union recognition may add some complexity to our business and may cause short-term disruptions and negative PR it will not alter our cost leadership in European aviation, or change our plan to grow to 200 million traffic a year by March 2024".

Ryanair said: "As we finalise union discussions along similar lines to that agreed in the United Kingdom, we expect some localised disruptions and adverse PR so investors should be prepared for same".

Michael O'Leary said that unions affiliated with rival carriers would try to disrupt its business by challenging its low-priced business model but added that Ryanair was willing to "face down" any such disruption. "It is fully prepared to face down any such disruption if it means defending cost base or high productivity model", the company said in its statement.

O'Leary said: "We are pleased to report this 12 per cent increase in profits during a very challenging third quarter", which included the "painful decision" to ground 25 aircraft.

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It said that the outlook for the remainder of 2018 was "cautious" and that although it maintained its full-year (profit) guidance in the range of €1.40 billion to €1.45 billion, this depended "heavily" on the "absence of union disruptions, unforeseen security events and close-in Easter bookings".

"When this process has completed, we expect to have similar engagement with cabin crew unions".

Regarding Brexit, O'Leary said Ryanair remains "concerned at the continuing uncertainty".

Mr O'Leary said Ryanair was not as optimistic as some of its rivals that it would be able to push through fare rises this summer.

The group added that cost pressures will grow with an increase in fuel prices and a further €100mln in staff costs after agreeing to a 20% pay rise for its pilots.

"We believe the United Kingdom government continues to underestimate the likelihood of flight disruptions to/from the United Kingdom". "We would, even at this early date, urge extreme caution on investor & analyst assumptions for fares in FY19".

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