Budget airline Ryanair has cautioned over earnings after counting the cost of lower-than-expected airfares over winter.
The carrier has trimmed its full-year, post-tax profit guidance from between €1.1 billion (£966 million) and €1.2bn to a new range of €1bn and €1.1bn. It noted that winter fares are expected to fall by 7 per cent, against a previously guided decline of just 2 per cent.
Last year, the Dublin-headquartered group booked profit of €1.45bn and the downgrade represents the second warning in quick succession.
Michael O’Leary, Ryanair’s colourful chief executive, warned that he cannot rule out further downgrades to profit guidance.
“There is short haul over-capacity in Europe this winter, but Ryanair continues to pursue our price passive/load factor active strategy to the benefit of our customers who are enjoying record lower air fares,” he said.
“While we have reasonable visibility over forward quarter four bookings, we cannot rule out further cuts to air fares and/or slightly lower full-year guidance if there are unexpected Brexit or security developments which adversely impact yields between now and the end of March.”
O’Leary also said that the competitive environment will “shake out” some of Ryanair’s rivals. “We believe this lower fare environment will continue to shake out more loss-making competitors, with Wow, Flybe, and reportedly Germania for example, all currently for sale,” he noted.
Ryanair is due to post its latest results on 4 February.