Ryanair shares are trading lower Monday, after the budget Irish airline unveiled its latest earnings results for the first quarter of the full 2018/19 financial year.
CEO Michael O’Leary said that figures had been hurt by higher wage costs as the decision to recognise unions had led to more talks and bargaining. Numerous bouts of industrial action, meanwhile, also affected the bottom line, as did higher oil prices and lower fares.
By 1125 BST, Ryanair shares were 4.37% lower at €14.87. The stock has been mixed in recent weeks, although the latest staff strike action has weighed over the past few days.
The airline published its Q1 results (for the April-June period) earlier Monday, which showed profits fell 20% to €319 million from the same period a year earlier. While passenger traffic was higher, the timing of Easter meant that average fares during the period were lower than in 2017.
A higher average oil price of $80 per barrel (up from $50 p/b in 2017) and increased wage costs, meanwhile, also hurt Q1 profits, the airline said.
Ryanair’s Michael O’Leary said:
“As previously guided, Q1 PAT fell by 20% to €319m due to lower fares, the absence of half of Easter in the quarter, higher oil prices and pilot costs,” Ryanair CEO O’Leary said in the earnings statement.
“Traffic grew 7% to 37.6m, despite over 2,500 flight cancellations caused by ATC staff shortages and ATC strikes. Ryanair’s lower fares delivered an industry leading 96% load factor,” he added.
Ryanair FY outlook
Despite the weaker start to the FY 2019 period, the budget Irish airline continues to anticipate full year profits of between $1.25-$1.35 billion.
With regards to the increased number of strike action Ryanair continues to experience, it said that if it continues throughout the summer, then there could be a review of the winter flight schedule.
In addition, looking towards the uncertainty surrounding Brexit negotiations, Ryanair said in an attempt to partially mitigate any issues arising from the result that, it had already applied for a UK air operator certificate. It expects to receive approval by the end of 2018.