Irish budget airline Ryanair has said it will continue to cut fares with the result that its full year profit is likely be at the lower end of what it previously forecast.
That news sent the share price of Europe’s largest low-cost carrier tumbling and other airlines also slumped. Investors focused on the profit warning and ignored the fact that Ryanair announces a better-than-expected net profit in the three months up to June of 136.5 million euros. That was largely due to lower fuel costs. Despite its sobering profit outlook Ryanair is still expected to roughly double its full-year profit compared with last year. The group – which is proud of the fact that it sacrifices comfort to cut costs – said it expects passenger numbers to grow by 15 percent this year. Having already cut fares by 13 percent this year, it is planning to slash them by another 20 percent or more. Ryanair’s Deputy Chief Executive Michael Cawley said: “We still have only ten percent of the total market in Europe so there’s plenty of scope for us to reduce fares to stimulate that growth.”