LONDON, May 20 (AFP): Irish no-frills airline Ryanair on Monday warned of further profits turbulence after annual earnings slumped almost a third, mainly on cheaper fares triggered by overcapacity in the European short-haul sector.
Profit after tax dropped 29 per cent to 1.02 billion euros ($1.14 billion) in the year ending March 31 compared with a year earlier, also on higher fuel and staff costs, the Dublin-based carrier said in an earnings statement.
Ryanair said net profits could decline further in 2019/20, to between 750 million and 950 million euros.
"Short-haul capacity growth and the absence of Easter in the fourth quarter led to a six per cent fare decline," chief executive Michael O'Leary said in the statement.
However the drop in fares attracted more passengers, whose numbers climbed nine per cent to 142 million for the year. Europe's short-haul sector is being weighed down by fierce competition despite some consolidation, including Ryanair's recent purchase of Austrian carrier Lauda.
"We expect further consolidation and airline failures in winter 2019 and again into 2020 due to over-capacity, weaker fares, and higher oil prices," Ryanair said Monday.
After falling sharply following the results update, shares in Ryanair recovered to trade down 0.4 per cent at 10.76 euros in Dublin stock market business.
"Fares down, traffic up, costs jumping-more of the same kind of themes we've been seeing for a number of quarters from Ryanair and for the whole European airline sector," noted Neil Wilson, chief market analyst at Markets.com.
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