Ryanair reveals profits warning
No-frills carrier Ryanair saw its stock market value plummet by a third yesterday after it announced an unexpected profits warning.
It was the first profits warning from the Dublin-based firm for nearly 20 years.
Ryanair shares descended GBP1.42 to GBP3.23 on the news.
The low-fare Irish airline saw a staggering GBP1.1 billion wiped off its value after it warned of a ten per cent fall in profits in the financial year ending in March.
Ryanair said a drop off in average revenue per passenger and “intense price competition” was to blame.
Analysts claimed Ryanair’s market lead was cut into by low cost rivals and “flag carriers” such as British Airways, Air France and Lufthansa.
Meanwhile, Ryanair awaits the expected negative ruling from the European Commission on whether the airline accepted illegal subsidies from a state-owned airport at Charleroi, outside Brussels.
Should the decision, revealed on February 3rd, go against Ryanair, the firm may have to repay between GBP2-13 million in landing fees.
CEO Michael O’Leary said the decision would ‘devastate’ the low cost sector, adding a negative decision would be tantamount to “an attack” on the low cost sector.
Controversially, he added: ‘This is a fundamentally negative decision that is largely driven by certain influences in the European Commission’ who he suggested would like to see things made a little easier for Ryanair’s rivals.”
One way or another, Mr O’Leary promised not to increase fares.
