Partly Cloudy

Partly Cloudy

max temp: 13°C

min temp: 11°C

Search

Ryanair to take £22m hit from flight cancellations but first half profits still climb

PUBLISHED: 13:44 31 October 2017

Ryanair chief executive Michael O'Leary.
Picture: Niall Carson/PA Wire

Ryanair chief executive Michael O'Leary. Picture: Niall Carson/PA Wire

Budget airline Ryanair will suffer a 25 million euro (£22 million) blow in the wake of its flight cancellation fiasco, but has still bolstered half-year profits by 11%.

The Irish firm, which has its main UK base at Stansted, said costs in its “sales, marketing and other” bracket had leapt 30%, as it dishes out compensation after around 700,000 customers were disrupted by cancelled flights stretching from September to March next year.

The low-cost carrier has come under fire after cancelling around 20,000 flights in the autumn due to an error over pilot holiday rosters.

Pre-tax profits climbed to 1.293bn euros (£1.139bn) for the six months ending in September, up from 1.168bn euros (£1.029bn) over the period last year.

The jump was driven by a strong Easter period, helping bolster customer numbers by 11% to 72.1m.

Revenues also picked up 7% to 4.425bn euros (£3.899bn), as it added 80 new routes and drove down air fares by 5%.

However, moves to boost pilot pay could impact its full year performance by as much as 100m euros (£88m), the company said.

Chief executive Michael O’Leary said: “These strong H1 results reinforce the robust nature of Ryanair’s low fare, pan-European growth model, even during a period which suffered a material failure in our pilot rostering function in early September.

“Prior to this event, we were on track to deliver strong H1 results during which we opened three new bases and 80 new routes.

“We took delivery of 35 new B737s in the first six months of 2017, we stimulated 11% traffic growth with 5% lower airfares, and achieved an industry record load factor of 97% in the peak summer months.”

The Dublin-based firm stuck by its annual profit guidance, saying it saw no reason to adjust the measure from between 1.40b euros (£1.23bn) and 1.45bn euros (£1.28bn), despite pilot rostering problems bumping up costs.

However, it said full-year traffic was now expected to slow from 131m customers to 129m after having to ground 25 aircraft.

Shares rose more than 4% in response to the half-year performance.

Neil Wilson, ETX Capital’s senior market analyst, said: “More passengers, lower fares and on course for another record profit - investors might be wondering what all the fuss was about in the wake of September’s cancellation fiasco.

“But beneath the rising revenues and passengers there are concerns about rising labour costs that will affect Ryanair’s unit cost advantage over peers.”

Focusing on Brexit, the airline said the UK Government “continues to underestimate” the flight disruption triggered by uncertainty over Britain’s exit from the European Union.

It added: “There remains a worrying risk of a serious disruption to UK-EU flights in April 2019 unless a timely UK-EU bilateral is agreed in advance of September 2018.

“We, like other airlines, need clarity on this issue before we publish our summer 2019 schedules in mid-2018 and time is running short for the UK to develop a bilateral solution.”

The financial update comes during a choppy period for the airline industry, with a string of European airlines - Monarch Airlines, Air Berlin and Alitalia - collapsing into bankruptcy.

Ryanair said it was poised to capitalise on the pressures facing the wider industry by growing its presence in Germany and Italy and adding more aircraft to “take up any slack” created by the demise of Monarch.

An elderly couple’s car managed to get stuck up an embankment after it crashed into a sign on the A14 westbound slip road for the Copdock Interchange this evening.

Paramedics have treated an elderly woman for serious injuries after a crash in Hadleigh.

Proposals which could lead to a merger between Babergh and Mid Suffolk districts have been further delayed after councillors demanded written legal advice before any further discussions are held.

After a year-long trial, no incidents or accidents, and the public in favour – cycling on Felixstowe’s promenade is set to be made permanent.

The Kesgrave High School pupil says she feels “amazing” after passing her driving test first time – a year earlier than her peers.

An ambulance on blue lights crashed into a road sign on a slip road off the A14 in Suffolk last night.

A Suffolk choir’s charity single for St Elizabeth Hospice is rocketing up the chart as it aims to be this week’s number one.

A 52-year-old Ipswich man banned from entering the town centre for three years will now spend several weeks behind bars.

Drivers are being held up at a busy town centre junction this evening.

Murder, rape and drug driving offences are among more than 200 cases in Suffolk and Norfolk where convictions could be jeopardised due to suspected manipulation of forensic evidence.

Most read

Show Job Lists

Topic pages

Newsletter Sign Up

Sign up to receive our regular email newsletter
MyDate24 MyPhotos24