Ryanair has reported a 20% fall in first quarter profits to €319 million (excl. exceptionals). Strong traffic growth (up 7%), overcapacity in Europe and the earlier timing of Easter, led to a 4% decline in average fares. Higher fuel and staff costs offset strong ancillary revenue growth in the quarter.
Guidance
Ryanair continues to guide FY19 PAT in a range of €1.25 billion to €1.35 billion. While Q1 fares were marginally stronger than previously expected, the recent weaker fare environment and the expected impact of crew strikes on forward pricing mean that Q2 fares will only rise by approx. 1% (previously guided +4%). With almost zero H2 visibility, our H2 guidance of broadly flat fares remains unchanged at this time. Ancillary revenue continues to perform well but will not offset a €430 million higher fuel bill or a 6% increase in ex-fuel unit costs.
The guidance is heavily dependent on close-in Q2 fares, crew strikes, continuing ATC staff shortages/strikes, the absence of unforeseen security events and no negative Brexit developments.
