Ryanair predicts failure to reach profit forecast

Ryanair is planning "aggressive" seat sales as a tactic against increased competition in Europe.
Written by Charlie Osborne, Contributing Writer

Ryanair has warned that this year's profit margin may miss analyst forecasts.

The budget airline said that the profit line may either miss or be at the lower end of expected financial results of between 570m to 600m euros (£480m to £508m) this year. Ryanair says that a dip in ticket prices and low booking rates for September, October and November are partly to blame.

In addition, the airline, famous for its low-priced seats on European flights, blamed increased competition from carriers based in the U.K., Spain, Ireland and Scandinavia. As a result, Ryanair plans to hit back with "aggressive" seat sales throughout the year.

When the news went mainstream, Ryanair share prices plummeted by 14 percent, and are still nursing a 12 percent drop ($42.90 per share) based on yesterday's market closing price of $48.86.

Ryanair's troubles don't end there. Last month, the U.K. Competition Commission (UKCC) demanded that the carrier reduce its stake in rival Aer Lingus in order to maintain competition on routes between the United Kingdom and Ireland.

Donal O'Neill, analyst with Goodbody stockbrokers told the BBC:

"This is a surprise statement from Ryanair and comes contrary to some of the commentary from the peer group and indeed Ryanair's own commentary at its June investor days."

Recently, a Channel 4 Dispatches documentary which explored how Ryanair's pilots view the airline. Despite Ryanair's 29-year safety record, pilots spoke about their fuel policy worries and a pilot survey found that 94 percent would like to see a formal inquiry into Ryanair's policies. In addition, 89 percent of the employees believed Ryanair lacked an "open and transparent" safety culture.

Via: BBC

Image credit: Ryanair


This post was originally published on Smartplanet.com

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