Ryanair has responded to a fall in profits by pledging to slash fares, with chief executive Michael O’Leary warning rivals will go out of business.
Irish-based Ryanair reported a 27% fall in profits to €
A 4% fall in yield per passenger will alarm City analysts. Ryanair is the most profitable of the low-cost carriers and the figures will spread concern throughout the sector.
Rather than curtail expansion, Ryanair plans to grow by 20% this year despite O’Leary describing the outlook as poor. He said airlines were entering a downturn and warned profits may fall into next year.
O’Leary said: “Higher oil prices, poor consumer demand, weaker Sterling and higher costs [mean] there is a significant chance profits may decline next year. There can only be one competitive response and that is for Ryanair to slash fares. Some carriers will not survive.”
The only bright point for the carrier was a 20% rise in ancillary revenues such as baggage and check-in charges