Ryanair, Europe’s largest low-cost carrier, has reported a sharp fall in profits for the first quarter of the year despite the rising number of passengers and revenues.
The Dublin-based company saw its profit after tax drop by 21% to €243 million ($270 million; £219 million), blaming a fierce price competition and higher fuel and staff costs.
Compared to June of last year, Ryanair’s revenues rose by 11% to €2.3 billion ($2.5 billion; £2.1 billion) but the company’s better performance has been curtailed, among others, by falling ticket prices due to downward pressures in markets such as Germany and lower consumer confidence caused by uncertainty over Brexit in the U.K.
Furthermore, Ryanair’s dependence on Boeing has made it vulnerable in light of the precautionary measures and the necessary grounding of its 737 Max jet family, and the consequent delay in obtaining its new Boeing jet planes.
On top of that, the company is faced with a prospect of pilot strikes in the U.K. and Ireland and a cabin crew strike in Portugal, potentially undermining Ryanair’s position vis-à-vis its competitors.
Nevertheless, despite these pressures, Ryanair maintains its prediction for its annual profits, expected to reach between €750 to €950 million ($833 million to $1 billion; £675 to £850 million), which would be broadly flat compared to its last year’s results.
