Ryanair shares are trading lower Monday, as the budget airline reported third quarter results in line with their guidance, while admitting the unionisation that is in progress, will likely lead to some adverse PR and disruptions.
By 1125 BST, Ryanair shares were trading 2.63% lower at €15.71. That’s the lowest level for the Ryanair stock price since January 10th.
Ryanair profits rise in line with guidance
Ryanair’s third quarter results – covering the three months to the end of 2017 – showed revenues rose 4% compared with the same period a year earlier. The Dublin-based airline also said net profits after tax were up 12%.
Meanwhile, Ryanair passenger numbers were 6% higher than the final three months of 2016, helping to achieve basic, earnings per share growth of 17%.
“We are pleased to report this 12% increase in profits during a very challenging Q3,” said Ryanair’s CEO, Michael O’Leary.
“Following our pilot rostering failure in Sept., the painful decision to ground 25 aircraft ensured that punctuality of our operations quickly returned to our normal 90% average. Our AGB customer service programme, coupled with 4% lower fares, stimulated 6% traffic growth to 30.4m at an industry leading 96% load factor,” O’Leary added.
Unionisation disruptions likely
However, while profits and customer growth numbers were positive, there was some talk in the earnings release and presentation, of the current pilot unionisation process for Ryanair.
“Union recognition is ongoing, we’ve made some progress in some countries less progress in others,” O’Leary said in a pre-recorded presentation. “We don’t believe unionisations will affect either our growth…or our unit cost leadership.”
In those countries where talks aren’t going smoothly, Aer Lingus pilots in Dublin was pointed out by O’Leary, Ryanair’s CEO said he was willing to take pilot disruptions where requests were unreasonable and would potentially impact on its low-cost base.
“Shareholders should expect some adverse public PR and some disruptions,” O’Leary said. “We will take those disruptions if it means defending either our current pay levels and current efficiencies, we don’t intend to compromise on either.”
But, O’Leary made it clear, several times, that “unionisation won’t affect our growth or profitability.”