Ryanair today blamed a sharp post-Brexit fall in the value of sterling as it issued a profits warning.
Europe’s largest budget carrier cut its full year net profit guidance by 5% from a previous range of €1.375 billion-€1.425 billion to a new range of €1.30 billion-€1.35 billion.
Ryanair confirmed that its fares in the first half of its financial year were marginally weaker at -10% compared to previously guided -9%.
However, these lower fares will be partly offset by a better than expected cost performance over the period.
The airline expects the full year load factor to be 1% better than previously guided at 94%, and that full year traffic will increase by 12% to 119 million passengers.
Chief executive Michael O’Leary said: “The recent sharp decline in sterling post Brexit – which accounts for approximately 26% of Ryanair’s full year 2017 revenues – will weaken second half yields by slightly more than we had originally expected.
“While higher load factors, stronger traffic growth and better cost control will help to ameliorate these weaker revenues, it is prudent now to adjust full year guidance which will rise by approximately 7% rather than our original guidance of 12%.
“This decline is primarily due to the impact of weaker sterling on our second half fares.
“We would caution that this revised guidance remains heavily dependent upon no further weakness in second half fares (-13% to -15%) or sterling from its current levels (€1 = £0.9050).
“As Ryanair will continue to be load factor active and price passive throughout the winter season at these low prices, there has never been a better time for customers to book or fly with Ryanair.”