It comes just a fortnight after the Irish budget carrier issued a profit warning, cutting its full-year forecast for the second time in the past three months.
The airline on Monday reported average fares down 6% in the three months to December 31, 2018, to less than €30 (£26) due to “excess winter capacity in Europe”.
Q3 revenue, though, grew 9% to €1.53 billion (£1.34 billion), which Ryanair said was on account of strong ancillary revenue up 26% to €557 million (£487 million), albeit offset by “higher fuel, staff and EU261 costs”.
Passenger numbers, meanwhile, grew 8% to nearly 33 million on a load factor of 96%, unchanged from Q3 2017.
“While a €20 million loss in Q3 was disappointing, we take comfort this was entirely due to weaker-than-expected air fares so our customers are enjoying record low prices, which is good for current and future traffic growth,” said chief executive Michael O’Leary, who Ryanair confirmed had ended speculation about his future and agreed a new five-year term at the helm.
“While ancillary revenues performed strongly, up 26% in Q3, this was offset by higher fuel, staff and EU261 costs,” he added.
Ryanair’s full-year profit guidance – excluding “exceptional” start-up losses in Laudamotion of about €140 million (£122.5 million) – remains in the range of €1 billion to €1.1 billion (£870 million to £960 million), the airline said, with a decline in fares likely to be offset by traffic growth, ancillary sales growth and better-than-expected unit cost performance during the second half of the year.
“While we have reasonable visibility of our Q4 bookings, we cannot rule out further cuts to air fares and/or slightly lower full-year guidance, especially if there are unexpected Brexit and/or security developments which adversely impact fares for close-in bookings between now and the end of March,” said Ryanair.
“We do not share the recent optimistic outlook of some competitors that summer 2019 airfares will rise. In the absence of further EU airline failures, and because of the recent fall in oil prices, we expect excess short-haul capacity to continue through 2019, which will we believe lead to a weaker – not stronger – fare environment.
“Ryanair will continue to be load factor active/price passive in this market, which we expect will lead to lower fares for our customers, robust traffic growth and more casualties among already loss making competitors before the year end.”
