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Ryanair Blames Collapse In Pound Since EU Vote For Profit Warning

October 19, 2016

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Ryanair has cut its full-year profit guidance - blaming the impact of the fall in the value of the pound since the UK's Brexit vote.

The no-frills carrier - which campaigned for the UK to remain in the EU - said an 18% reduction in sterling's value meant profits were likely to come in 5% down on its previous guidance to between €1.3bn (£1.17bn) and €1.35bn.

The company cautioned that its new guidance was conditional on the pound remaining at current levels.

It hit a new six-year low against the euro on Monday.

The airline said the referendum's currency impact would reduce average fares by between 13% to 15% in the second half of its financial year.

It added that slightly weaker than expected fares in its first six months were partly offset by falling costs.

Chief executive Michael O'Leary said: "While higher load factors, stronger traffic growth and better cost control will help to ameliorate these weaker revenues, it is prudent now to adjust full year guidance which will rise by approx 7% (over FY 2016) rather than our original guidance of 12%.

"This decline is primarily due to the impact of weaker Sterling on our H2 (second half) fares.

"We would caution that this revised guidance remains heavily dependent upon no further weakness in H2 fares (-13% to -15%) or Sterling from its current levels."

Ryanair responded to the vote to leave the EU by cautioning on future UK investment - saying it may be forced to issue a profit warning.

However, its recent fleet expansion plans included new jobs for the UK.

Source: Yahoo - Sky News

October 19th 2016

 

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