Ryanair warns on profits as strikes hit income

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Ryanair strikers in Belgium.
Reuters

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Ryanair staff in Germany, Holland, Belgium, Spain and Portugal went on strike last week

Ryanair has warned investors its full-year profits will be lower than expected, partly due to the recent wave of industrial action.

The airline said its profits would be 12% lower than the €1.25-1.35bn (£1.11-1.2bn) previously forecast, and it now expects profits of between €1.1-1.2bn.

Ryanair said this was due to higher oil prices, higher costs associated with EU flight compensation rules, and weaker fares due to the recent strikes.

It warned it may lower forecasts again.

Shares in the airline opened down 8%.

Last week, cabin crew and pilots in Germany, Holland, Belgium, Spain and Portugal took industrial action which led to a number of flight cancellations.

Bigger fuel bill

Ryanair said fares for the third quarter of the year were lower as forward bookings, particularly for the October school mid-terms and Christmas, were being affected by fear of further strikes.

The carrier said it had not hedged its fuel bill against prices rises, and this meant it would be paying 10% more for its fuel thanks to the recent rise in the global price.

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Ryanair chief executive Michael O’Leary has called the strikes “unnecessary”

Ryanair chief executive Michael O’Leary said: “While we successfully managed five strikes by 25% of our Irish pilots this summer, two recent co-ordinated strikes by cabin crew and pilots across five EU countries has affected passenger numbers (through flight cancellations).

“Customer confidence, forward bookings and [third quarter] fares have been affected, most notably over the October school mid-terms and Christmas, in those five countries where unnecessary strikes have been repeated.”

The airline is making cuts to some routes and closing some of its bases.

Its four-aircraft Eindhoven base will close, although most routes to and from Eindhoven will continue on overseas-based aircraft. It is taking the same action at its two-aircraft Bremen base and is making cuts at its Niederrhein base.

Ryanair says all affected customers have been contacted by email or text message, and will be re-accommodated on other flights or refunded as they wish.

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