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Ryanair says on target for record annual profit despite cancellation mess

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Ryanair says on target for record annual profit despite cancellation mess

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DUBLIN – Ryanair <RYA.I> is on course to post record annual profits despite a rostering mess-up that forced it to cancel 20,000 flights and sparked a dispute with pilots, Europe’s busiest airline said on Tuesday. The Irish airline said it was confident it could attract the number of pilots its needs to fulfil ambitious plans to grow from 130 million to 200 million passengers a year by 2024 despite the rejection by crew at its largest base of a pay hike. Ryanair has seen over 2 billion euros knocked off its share price since it announced the first wave of cancellations on Sept. 15, an emergency measure to free up standby pilots to ensure the smooth operation of its fleet of 400 planes. The cancellations sparked a wave of bad publicity and forced Ryanair to cut its growth plans for the first time in years. But it has insisted this is a temporary measure and its long-term growth plans remain intact. The airline fired its chief operations officer and hired Malaysia Airlines CEO Peter Bellew to spearhead an effort to better retain and attract pilots. Increases in pay will cost around 100 million euros per year if accepted by pilots in all of the company’s bases, it said. Ryanair said it had cut fares by 5 percent in the six months to months to Sept. 31, the first half of its financial year. Fares for the six months to March 31 will fall by between 4 and 6 percent rather than the 5 to 7 percent previously guided. Overcapacity has pushed down short-haul air fares across Europe in recent years, helping push rivals Air Berlin <AB1.DE>, Britain’s Monarch [MONA.UL] and Alitalia [CAITLA.UL] into administration this year. Rivals have said they saw an uptick in bookings in the days after the initial Ryanair cancellations as passengers were unsure which Ryanair flights would be cancelled. Ryanair said its profit after tax was 1.293 billion euros in the six months to the end of September, in line with an average forecast of 1.298 billion euros in a company poll of analysts. Ryanair reiterated its forecast that it would make a profit after tax of between 1.4 billion and 1.45 billion euros in its financial year, which ends on March 31, 2018. The average forecast of over 10 analysts polled by Ryanair ahead of the release was for a profit of 1.433 billion euros, down from a forecast of 1.488 billion in the same poll three months ago. “These strong H1 results reinforce the robust nature of Ryanair’s low fare, pan-European growth model even during a period which suffered a material failure in our pilot rostering function,” Chief Executive Michael O’Leary said in a statement.

(Reporting by Conor Humphries)
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