Ryanair has warned it could miss its full-year profit forecast amid a noticeable dip in bookings for the coming months. That would be the first time that has happened in a decade.
Europe’s biggest budget airline blamed a weaker currency in its largest market, Britain, along with growing competition – particularly in Britain, Scandinavia, Spain and Ireland.
“I have no doubt that the market will be weaker than the industry is expecting over the next couple of months and we are going to respond to that by being out there first and being aggressive with pricing,” Chief Executive Michael O’Leary said.
Analysts said it was too early to know whether the weakness was specific to Ryanair or a broader industry problem.
“Ryanair’s rivals certainly haven’t indicated they have seen this kind of weakness, though Ryanair has a history of calling things early,” said Davy Stockbrokers’ Stephen Furlong.
The surprise announcement caused the Irish group’s shares to slump to their lowest in five months and other airline stocks also fell along with tour operators.
All European carriers have been struggling with weak economies, high fuel prices and the cost of upgrading their fleets.
Ryanair said it would respond to weak bookings by grounding 70-80 aircraft in the winter, up from an earlier plan to ground 50, and with “aggressive seat sales”.
On the currency front Finance chief Howard Millar said the weaker pound could wipe up to 50 million euros off the company’s profit.
Although sterling has strengthened to around 85 pence per euro in recent days, it is still trading well below the levels of around 79 pence this time last year.