Ryanair warns of turbulence to come if strikes continue

Budget airline Ryanair has warned of more turbulence ahead after a tough summer in which it was hit by strikes and rising costs. 
The low-cost carrier said that full-year profits would be 12pc lower than expected, from €1.25bn-€1.35bn (?1.1-?1.2bn) to €1.1bn-€1.2bn, after a drop in traffic due to co-ordinated pilot and cabin crew strikes in Germany, Holland, Belgium, Spain and Portugal in September.
It added that further disruptions in its third quarter “cannot be ruled out”, which may require full-year guidance to be lowered further.
Ryanair admitted it had to lower its fares after customer confidence was knocked by the strikes, disrupting bookings for October half-term and Christmas. 
The news shook the aviation sector, with Ryanair shares falling 8.5pc to 12p, a two-year low, in morning trading.
Elsewhere in the industry, EasyJet fell more than 5pc, Air France was down 3.5pc, Lufthansa 2pc and British Airways owner IAG more than 3pc.
Airlines - easyJet v Ryanair
As well as cutting costs to entice customers, Ryanair blamed higher flight compensation regulations and rising fuel costs.
The carrier said it would be paying 10pc more for its fuel bill as it had not hedged against rising prices. Crude oil has risen 16pc since mid-August to a four-year high.
“While we regret these disruptions, we have on both strike days operated over 90pc of our schedule,” said Michael O'Leary, chief executive.
Mr O’Leary added that although the strikes were managed successfully the airline had now cut its capacity for winter 2018 by 1pc in response to the additional pressures.
Ryanair warns of turbulence to come if strikes continue

Ryanair boss Michael O'Leary regrets the disruptions
Starting from Nov 5, it will close its four-aircraft Eindhoven base, its two-aircraft Bremen base and cut its five-aircraft Niederrhein base to three.
However, it said most routes would either continue with remaining aircraft, or foreign and non-German aircraft.
In August 2017 the airline’s share price reached an all-time high as the company sought to improve its customer service. But it has been on a downward trend since then, slumping 38pc.
Ryanair confirmed that affected customers had been contacted for rescheduled flights or refunds, and pilots and cabin crew would be consulted to minimise job losses at the bases.
Rob Byde, analyst at Cantor, said: “Ryanair has a tough couple of quarters ahead with bookings and fares under pressure, and rising fuel costs squeezing margins.”
Mr Byde said that after today’s fall it would trade in a narrow range until there is more visibility on spring and early summer 2019 bookings.
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