The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG Bank S.A. accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication.
Ryanair (LON:RYA) posted October passenger growth of 11% to 13.1 million customers, according to a recent press release.
However, the low-cost airline also said that it was forced to cancel a little over 300 flights in October due to a five-day airport handler strike that took place at Brussels Zaventem, winter storms and a shortage of air traffic controllers in key airports in the UK, Germany and France.
‘Ryanair’s Oct traffic (which includes Lauda) grew by 11% to 13.1m customers, due to lower fares and continuing success of Lauda’s summer schedule,’ Chief Marketing Officer at Ryanair Kenny Jacobs said.
‘During October, we were forced to cancel just over 300 flights because of a five day airport handler strike at Brussels Zaventem, some adverse weather (winter storms) and continuing ATC staff shortages in the UK, Germany and France,’ Jacobs said.
‘We operated over 71,400 scheduled flights with over 80% of these flights arriving on time, as Ryanair continues to deliver the lowest fares, with the best punctuality of any major EU airline,’ he added.
Slight turbulence for Ryanair
In October, Ryanair reported a 7% fall in profits to €1.2 billion in its first half (H1) 2019 results, with average fares down 3% due to excess capacity in Europe.
The disappointing results were blamed on repeated airport traffic controller (ATC) strikes and staff shortages, which led to a surge in flight cancellations.
The company also faced higher fuel costs in H1 19, with the spot price for oil climbing as high as $85bbl during a period which saw interest rates rise, putting airline margins under significant pressure.
Ryanair contended in its report that ‘weaker, unhedged, European airlines will fold this winter’, because of the myriad of macroeconomic pressures facing the industry.
‘As recently guided, H1 average fares fell by 3%,’ CEO Michael O’Leary said. ‘While ancillary revenues performed strongly, up 27%, these were offset by higher fuel, staff and EU261 costs.’
‘Our traffic, which was repeatedly impacted by the worst summer of ATC disruptions on record, grew 6% at an unchanged 96% load factor,’ he added.
Ryanair headwinds
Looking ahead, the low-cost carrier warned that the airline pricing environment, capacity growth in Europe, increased fuel costs and greater competition from new and existing carriers could significantly impact its performance in the second half of the financial year.
Ryanair also said that uncertainties surrounding Brexit, currency movements and the wider economic environment in Ireland, the UK and Europe is a concern for the company.
Last year, the low-cost carrier was hit with the first ever pilots’ strike, which saw flight crews in Germany stage a four-hour walkout. In the wake of the strikes, Ryanair agreed to recognise unions and has since signed agreements with pilots and cabin crews in Ireland, Italy, the UK and Germany, with the carrier continuing to negotiate with workers in other European markets.
.jpg)
