Ryanair profits rise as strong prices offset pilot-crisis impact
(Bloomberg) Ryanair Holdings' first-half earnings gained 11% as price declines stabilised over the peak summer months, more than offsetting the cost of a pilot shortage that triggered flight cancellations for about 700,000 passengers.
Net income in the six months to September 30, rose to €1.29 billion from €1.17 billion a year earlier, Dublin-based Ryanair said Tuesday.
Europe’s biggest discount airline stood by its forecast for full-year profit in the range of €1.4 billion to €1.45 billion, even after paying out €25 million on refunds and €40 million for extra staffing costs.
Ryanair has scrapped more than 20,000 flights following a botched rescheduling of pilot leave to meet a change in Irish labour rules.
Employee poaching by competitors including Norwegian Air Shuttle ASA has exacerbated the crew shortage, and while the reduced schedule affects only a small percentage of flights, it has impacted expansion plans and encouraged labour leaders to push for unionisation.
"These strong results reinforce the robust nature of Ryanair’s low fare, pan-European growth model even during a period which suffered a material failure in our pilot rostering function," Chief Executive Officer Michael O’Leary said in the earnings statement. He pledged to review pilot rotas, bases and pay as the company seeks a permanent settlement to the crisis.
Fares fell 5% in the fiscal first half, compared with an initial forecast for an 8% slide, and are set to drop by 4 to 6% in the second six months, better than an earlier prediction of 5 to 7%, Ryanair said.