Budget airline Ryanair (RYA) could come under pressure as a fresh swathe of pilot strikes are underway, resulting in 400 cancelled flights.

Shares in the airline are down 1.4% at €13.28 on the news.

In July, Ryanair reported a 20% drop in profit after tax to €319m as increased pilot costs and higher oil prices dragged on trading.

Investors should note profit guidance was lowered from €1.37bn to a range of €1.25bn to €1.35bn in the year to 31 March 2019 earlier this year.

Strike action is not the only headwind as a potential hard or no-deal Brexit could affect the company’s outlook.

WILL RYANAIR CAPITULATE?

Ryanair will need to decide if it can ride out the industrial action or meet at least some of the strikers demands on pay and conditions.

The company is already planning a ‘substantial’ investment in staff, including a €200m hike in staff costs to boost pay and attract new talent.

This underpins an ambition to increase the airline’s number of aircraft to nearly 600 and reach 200m passengers per year by 2024.

This is not the first time Ryanair has been affected by strikes of late after widespread flight cancellations in 2017.


Issue Date: 10 Aug 2018