Ryanair cautious on fuel costs as full-year profit rises by 10%

22 May, 2018, 20:59 | Author: Earnest Bishop
  • Michael O'Leary has 'sincerely apologised' to customers affected by cancellations

The speed of that shakeout, he told Bloomberg Television, will determine future profitability. Among the "key issues" for the next 12 months, he said, was the fate of low-priced, long-haul carrier Norwegian Air Shuttle. That would be the carrier's first drop in annual profits in five years. Norwegian is now offering one-way flights, scheduled in December, from Oakland, Calif., to London for as little as $144.90.

O'Leary said Norwegian was "hugely loss-making a year ago with oil at $40 a barrel". The airline has promised to raise salaries and the City will be keen to hear how much they will add to the company's costs.

In the case of Norwegian Air, a "rescue" by British Airways owner IAG SA would bring far less benefit than a grounding, since it would only slow capacity growth, the CEO said.

It warned they included a potential €400m rise in fuel bills as oil prices continue to climb despite it being 90% hedged.

At 1215 GMT (10.15 a.m. ET), Ryanair shares, down 18 percent from an all-time high before the first cancellations were announced but up about 14 percent from mid-December, were 5.3 percent higher at 16.295 euros, reversing earlier losses. Sales have rebounded internationally for the big three recently.

"Airfares tend to follow oil prices (as they have downwards over the last three years) but with a lag of up to 12 months before higher oil prices feed through to higher airfares".

Ryanair Holdings PLC (LON:RYA) shares slipped on Monday as it reported a 10% increase in 2018 profits but cut its estimates for the year ahead, saying it is on the "pessimistic side of cautious".

More news: Sheriff reveals new details on Santa Fe High School shooting timeline
More news: Bannon Condemns Mnuchin's Trade Truce as China Giveaway
More news: Al menos cinco municipios de Antioquia amenazados por Hidroituango

The group forecast profit after tax of between 1.25 billion and 1.35 billion euros over the next 12 months, lower than analyst forecasts.

"Fuel will be a major cost headwind for the next 24 months", it said.

Ryanair added that it expects a shortage of experienced pilots in Europe to persist.

While the company expects to grow traffic by 7 percent to 139 million this financial year, up on the 138 million last forecast, and saw revenue from ancillary products outperforming that, it said that would not be enough to offset higher costs and its expectation for broadly flat fares over the full year.

"This may be partly ameliorated by the switch of some charter capacity back to previously security challenged markets such as Turkey and Egypt, " he said "We expect later in the year, some upward pressure on pricing as significantly higher oil prices impact margins, especially those European Union airlines who continue to expand despite having no prospect of achieving profitability".

Ryanair said it remained concerned at the likely impact of a hard Brexit.



'No alternative' to Iran nuclear deal, European Union foreign policy chief tells US
Trump also said he would reinstate USA nuclear sanctions on Iran and impose "the highest level" of economic bans on the Islamic Republic.

Palestinians Ask Hague Court to Open Full Inquiry Into Israel
It notes that in the case of Gaza, for instance, it uprooted all settlements there when it withdrew in 2005. Israel, if it wanted any charges filed against Palestinians, would have to become a member of the court.

General Electric to merge its transportation business with Wabtec
The great risk in a GE breakup is that it sells off its assets to bring in cash and is left with a mountain of liabilities. One-thousand units are in the pipeline. "There has been a relationship between (us) that goes back decades", he said.

Samsung Galaxy S Light Luxury price and features revealed
The J6 comes with 3GB RAM + 32GB storage and 4GB RAM + 64GB storage options with expandable memory up to 256GB via a microSD card. The rumored Galaxy S9 Mini is now officially as Samsung Galaxy S Lite Luxury Edition (SM-G8750) in China.

Cougar Kills 1 Mountain Biker, Injures Another in Attack Near Seattle
When officials arrived at the scene, they found the big cat on Brooks's body, which the cougar had covered up with debris. One man was killed and another was injured in a rare cougar attack in Washington state's Cascade foothills Saturday.

Celtics to make lineup change, Cavs sticking with same five
And, of course, they didn't have James, who moved past Kareem Abdul-Jabbar (2,356) for the most field goals in playoff history. I've got to keep his body as fresh as possible. "The Man Above has given me some abilities I try to take advantage of".

Gay Abuse Victim Claims Pope Told Him 'God Made You like This'
Mr Cruz spoke of his happiness after receiving a personal apology from Pope Francis for the abuse that he suffered. Describing his encounter with the Pope to CNN , Cruz said: "You know Juan Carlos, that does not matter".

Netanyahu hails tough new U.S. strategy on Iran as 'the right policy'
The European Union is now moving ahead with launching a "blocking statute" against US sanctions on Iran to soften the blow. The Treasury Department already has reimposed sanctions on the head of Iran's Central Bank and other companies and groups.

How Meghan Markle's Wedding Attire Paid Tribute to Princess Diana
Kate, the Duchess of Cambridge and Princess Charlotte leave, after the wedding ceremony of Prince Harry and Meghan Markle at St. But we're particulalry loving the sheer joy on the face of one of Jessica Mulroney's twins carrying Meghan's train.

How to watch 2018 Preakness Stakes
Ortiz aboard Good Magic (5) during the 143rd running of the Preakness Stakes at Pimlico Race Course . He won in 1:55.93, after leading at every quarter pole - three by a head, twice by a half-length.