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Ryanair holds profit forecast despite flights chaos
[LONDON] Ryanair said Tuesday it is sticking to its full-year profit forecast this year, despite cancelling thousands of flights largely owing to a pilots shortage.
The Irish no-frills carrier, which runs its business year from April to March, said in a statement that net profit rose 11 per cent in the six months to September.
And it still expected to deliver annual profit after tax of between 1.4 billion euros and 1.45 billion euros (S$2.2 billion and S$2.3 billion).
"These strong first-half 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," said chief executive Michael O'Leary.
Ryanair last month revealed it had been forced to cancel 20,000 flights through to March, causing the company to take a hit of about 25 million euros in its first half that is expected to reach roughly double the figure on compensation costs.
The Dublin-based carrier has been hit by pilots and cabin crew being forced to take outstanding holiday entitlement by the end of the year as part of new company rules.
It has also been forced to cancel flights because of air traffic control delays, strikes and weather disruption.
But on Tuesday the airline said net profit grew to almost 1.3 billion euros during its first half compared with the six months to the end of September in 2016.
Passenger numbers rose 11 per cent to 72.1 million and was set to reach 129 million for the year, down slightly on an earlier estimate of 131 million.
"Having grown first-half traffic... the grounding of 25 aircraft means we will slow second-half growth to approximately four per cent," Ryanair added.
Following the results update, shares in Ryanair were trading up six percent at 16.70 euros on the Irish Stock Exchange.
"Ryanair's latest results have the usual swagger, with just a hint of contrition over September's rostering fiasco," noted Laith Khalaf, senior analyst at stockbrokers Hargreaves Lansdown.
"The numbers show little signs of weakness, but the reporting period only covers the start of the problems encountered by Ryanair, so further costs could arise. Ryanair isn't blinking though, and has maintained its profit forecast for the year." Ryanair is planning to fly 25 fewer aircraft during its European winter schedule, hitting less than one per cent of its customers but more than doubling the amount of passengers originally affected by a crisis dogging the airline since mid-September.
In addition, it will operate 10 fewer aircraft from April 2018, further affecting its growth plans.