Ryanair sticks to profit guidance after pilot roster problems
Ryanair said it remained on track for record annual profit despite a pilot rostering foul-up that has affected the airline's reputation and added to expected costs.
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The budget carrier reported an 11% increase in first-half profit to €1.3bn (£1.2bn) even as it cut fares by 5%. Revenues rose 7% to €4.4bn and customer numbers rose 11% to 72.1m in the six months to the end of September.
Ryanair ran short of pilots in last month due to what it called a "material failure" in its management of their rosters. As planes were delayed the airline cut flights to keep its punctuality numbers up, causing disruption for 700,000 passengers.
In response, Ryanair offered its pilots more money and better career prospects that, if accepted, will add €45m to this year's costs and €100m for a full year. But Ryanair stuck to its forecast for record annual profit after tax between €1.4bn and €1.45bn.
Michael O'Leary, Ryanair's chief executive, said: "These strong H1 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. We see no reason to alter our full year profit after tax guidance."
Ryanair shares rose 5% to €16.60 by 0842 GMT.
He said the improved pay offer for pilots would move Ryanair from being competitive with its rivals to offering materially higher pay and better working conditions and job security. He said Ryanair would put in the time and management effort to make sure similar problems never recur.
O'Leary, a fierce critic of Brexit, said he was concerned about disruption to flights between the UK and EU countries in April 2019 unless Britain and the EU reach a deal before September 2018.
"We, like other airlines, need clarity on this issue before we publish our summer 2019 schedules in mid-2018 and time is running short for the UK to develop a bilateral solution. We worry that the UK government continues to underestimate the likelihood of such a flight disruption to/from the UK."