Ryanair's full year profit has fallen 29% year on year to €1.02 billion from €1.45 billion in the previous year.
The results come even though the airline posted strong traffic growth, up 7% to 139 million. Ryanair is blaming a fall in fares, which fell 6%, higher fuel and staff costs as well as EU261 compensation claim costs. The airline group has issued a cautious warning regarding profit for the year to come. Ryanair also wrote down the cost of the acquisition of Lauda, which became a wholly owned subsidiary of the Ryanair Group. Although Ryanair has consolidated three million customers in its first year of operations to March 2019, it suffered exceptional start-up losses of €139.5m, mainly due to the very late release of its summer 2018 schedules, very low promotional fares, expensive short-term aircraft leases and an unhedged fuel position.
During the year, Ryanair closed unprofitable bases in Bremen & Eindhoven and cut aircraft numbers in Niederrhein, Hahn and the Canary Islands. The airline points to similar contraction by its European rivals and states that further consolidation and airline failures are expected in winter 2019 and again into 2020 due to "over-capacity, weaker fares, and higher oil prices particularly among those airlines who are significantly unhedged, or unable to hedge".
Meanwhile, the group's revenue rose 6% to €7.6 billion, which it has attributed to the rise in passengers.
Ryanair shares fell nearly 6% to hit €10.16 in early trading following the release of the results.
Ryanair CEO Michael O’Leary said: "Short-haul capacity growth and the absence of Easter in Q4 led to a 6% fare decline, which stimulated 7% traffic growth to over 139m (142m guests incl. Lauda). Ancillary sales performed strongly up 19% to €2.4bn, which drove total revenue growth of 6% to €7.6bn."
In other news, Ryanair also confirmed that it has delayed the delivery of its first five 737-Max aircraft to Winter 2019 (subject to regulatory approval by EASA), but has re-iterated it has the "utmost confidence in these aircraft".
Another 42 aircraft is due over the winter season, but will be delivered over the summer of 2020.
Ryanair confirmed that it has recently concluded a low-cost, €750m unsecured, five-year bank facility, which will help it to fund this year’s peak capex of c.€2bn, maturing secured debt and other general corporate purposes. The group also indicated that it is in advanced negotiations to sell 10 of its oldest 737s for over $170m before the end of March 2020.