Ryanair Q3 results: airline share price down 5% after reporting €20 million loss
The low-cost airline reported a net loss of €20 million after suffering a tough year of trading, with strong traffic growth offset by a decline in fares and higher fuel costs.
Ryanair recorded a €20 million lost in its third quarter (Q3) of 2018, with company blaming the its disappointing set of results on lower air fares and higher fuel costs.
‘While a €20m loss in Q3 was disappointing, we take comfort that 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, Ryanair Group CEO Michael O’Leary said.
‘While ancillary revenues performed strongly, up 26% in Q3, this was offset by higher fuel, staff and EU261 costs,’ he added.
Ryanair results: key figures
Despite suffering a significant financial loss in Q3, the low-cost airline recorded an 8% increase in traffic growth, transporting around 33 million passengers, which was offset by a 6% decline in average fare price due to excess winter capacity in Europe, the company said.
Meanwhile, stronger ancillary revenue growth rose 26% to €557 million, which was offset by higher fuel, staff and EU 261 costs.
‘Q3 revenue increased 9% to €1.53bn, up 1% per guest, due to a strong performance in ancillary revenue and increased traffic stimulated by a 6% decline in average fares to under €30 due to excess short-haul capacity in Europe,’ the company said.
Ryanair share price slides 5% amid disappointing Q3 results
Weaker than expected fares caused the low-cost airline to slash its full year profit forecast for the second time in the last three months, with Ryanair expecting its profit for the end of the fiscal year in March to slide by as much as 31% after what has been a challenging 12 months.
Over the last year nine months, the airline has endured staff strikes over the summer, higher oil prices and short-haul overcapacity.
After issuing its second profit warning for the quarter, the airline saw it share price tumble as much as 5% on Monday morning, with Ryanair still concerned that a no-deal Brexit is very much on the cards and could add to its myriad of macroeconomic headwinds in its final quarter.
Ryanair announces group restructure following Q3 results
In the company’s Q3 trading update, Ryanair announced that after a difficult 2018 O’Leary has agreed a new five-year contract to stay on as Group CEO to help provide stability for shareholders and guide individual CEOs at Ryanair, Laudamotion and Ryanair Sun.
Meanwhile, the company’s chairman David Bonderman has also signed on for an additional year until the summer of 2020, after which he will not be considered for re-election at the upcoming AGM in September next year.
The airline used its recent trading update to announce restructuring plans that will see the group create four subsidiaries over the next 12 months.
‘A small senior management team will oversee the development of 4 airline subsidiaries; Ryanair DAC, Laudamotion, Ryanair Sun and Ryanair UK, each with their own CEOs and management teams,’ the company said.
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