Via Yahoo Finance

Ryanair has reported a 29% dip in annual profits to just over €1bn (£890m) as weaker fares and higher costs weighed on its bottom line.

The no-frills carrier reported on its progress as the sector navigates turbulence from rising fuel costs and stiff competition – headwinds that have seen the likes of Flybmi and WOW collapse in recent months.

Ryanair said it had seen traffic growth of 7% over the year to 31 March – helping revenues rise 6% to €7.6bn (£6.6bn).

:: EasyJet bookings hit by Brexit and economic uncertainty

But it also reported challenges from a 6% decline in fare costs and a fuel bill of €440m (£385m) – a rise of more than 20% on the previous 12 months.

Its shares – and those of its rivals – fell in response to the figures.

The company had previously guided it did not expect schedules to suffer an impact from the grounding of the Boeing 737 MAX fleet following two crashes that killed almost 350 people .

Ryanair does not currently have any of the aircraft but has 135 on order.

The airline said on Monday that it continued to have “utmost confidence” in the planes, which are awaiting global clearance to fly again following modifications to anti-stall software.

Ryanair said benefits to its fleet from the 737 MAX would include 4% more seats, a 16% improvement in fuel efficiency and a reduction of 40% in noise emissions.

It said the updates needed to the planes meant it was now no longer expecting delivery of its first five aircraft until winter.

READ ALSO  Biden faces first foreign policy test with Russian balancing act

Ryanair said its guidance of “broadly flat” profits for the current year depended on a number of other factors including “no negative Brexit developments” and the fare price environment – particularly in the second half.

The company said: “Assuming revenue per passenger (RRP) growth of 3%, we are guiding broadly flat group profits.

“This will range from €750m (£660m) if RPP rises 2%, up to €950m (£830m) if RPP rises 4%.”

The board also approved a €700m (£610m) share buyback scheme to run over the course of the next 12 months.

Commenting on the financial performance for 2018-19, chief executive Michael O’Leary said: “Short-haul capacity growth and the absence of Easter in Q4 (fourth quarter) led to a 6% fare decline, which stimulated 7% traffic growth to over 139 million.

“Ancillary sales performed strongly, up 19% to €2.4bn (£2.1bn), which drove total revenue growth of 6% to €7.6bn (£6.6bn).”

Shares – flat in the year to date – were 6% lower in early deals. EasyJet was the biggest faller on the FTSE 100, down almost 4%, while travel operator TUI was 2.5% lower.

Neil Wilson, chief market analyst at, said: “Fares down, traffic up, costs jumping – more of the same kind of themes we’ve been seeing for a number of quarters from Ryanair and for the whole European airline sector.

“Ryanair has issued a couple of profits warnings in the last year but we have little sense that things are really improving as there still a lot pressure on margins.

“Today’s full-year numbers and outlook cement the view that it’s a tough space to be in right now – although we would hope that summer 2019 will be the worst of it.

READ ALSO  ‘Technology war’ intensifying as gamers grapple with profit-making bots for PS5

“The risk is that the downturn in the macroeconomic outlook in Europe worsens as this would further dent airlines’ bottom lines.”