Ryanair reported on February 6, a 8% fall in third quarter profits to €95 million, as average fares fell by 17% to just €33 per passenger. Traffic grew 16% to 29m customers during the period, however, with Q3 unit costs cut by 12% (ex-fuel unit costs were down 6%).
“As previously guided, our fares this winter have fallen sharply as Ryanair continues to grow traffic and load factors strongly in many European markets,” said Ryanair’s CEO Michael O’Leary. “These falling yields were exacerbated by the sharp decline in Sterling following the Brexit vote.”
O’Leary added that the airline had responded to this downturn by reducing fares by 17% and cutting unit costs, which helped to grow traffic and raise load factors by 2% to 95% (a Q3 record).
Ryanair is also continuing to grow capacity, add new routes and bases, which at a time when other EU airlines are also adding capacity, means the price environment remains weak. “We expect the uncertainty post Brexit, weaker Sterling and the switch of charter capacity from Turkey, Egypt and North Africa into Spain and Portugal, will continue to put downward pressure on pricing for the remainder of this year and FY18. As the airline offering the lowest fares in every market, our prices are falling faster than we initially planned but this is good news for customers, and our airport partners but bad news for competitors who cannot match our low prices,” the airline said.