Ryanair profit slumps 29%; delays first Boeing 737 MAX deliveries
Source - SMW
Budget carrier Ryanair booked a 29% fall in annual profit after rising sales were more than offset by higher fuel and staff costs.
Net profit, excluding an exceptional €139.5m start-up loss at Lauda, fell 29% to €1.02bn, even as revenue rose 6% to €7.2bn.
Ticket prices also came under pressure, falling by 6% over the period and hurting margins.
Short-haul capacity growth and the absence of Easter in the fourth quarter led to the ticket price decline, chief executive Michael O'Leary said.
Ryanair also announced that it had delayed the delivery of its first five Boeing 737-MAX aircraft to winter 2019.
The company said it continued to have 'utmost confidence in these aircraft', which it said had 4% more seats, were 16% more fuel efficient and generated 40% lower noise emissions.
The aircraft were still expected to deliver significant unit cost savings for the next five years, although the delayed deliveries in 2019 meant that there would be no meaningful cost benefit until the 2021 financial year.
Ryanair said its outlook for 2020 remained 'cautious on pricing'.
Traffic was seen growing by 8% to 153m and profits growth was seen as broadly flat, assuming revenue per passenger growth of 3%.
'While first-half bookings are slightly ahead of last year, fares are lower and we expect this trend will continue through 2019,' the company said.
'We have zero second-half visibility.'
'Costs will increase as our full-year fuel bill jumps by another €460m.'
'Ex-fuel unit costs will rise by just 2%, mainly due to stronger sterling, the absence of Lauda prior-year cost comparisons for most of first-half and delivery delays of the 737 MAX aircraft this year.'
'This guidance is heavily dependent on close-in peak summer fares, second-half prices, the absence of security events, and no negative Brexit developments.'