- Reuters / Eddie Keogh
- Ryanair says UK government “continues to underestimate the likelihood of flight disruptions to/from the UK.”
- Budget airline says it needs clarity on a transition deal by summer or flights could be grounded and tickets invalid.
- Airline reports strong third-quarter results but is cautious on outlook.
- €750 million share buyback announced.
Ryanair has reiterated its warning of “serious disruption” to flights between the UK and EU unless a transition deal is agreed imminently, warning that “time is running out for the UK to develop and agree these solutions.”
Irish budget airline Ryanair said in a trading update on Monday: “We remain concerned at the continuing uncertainty surrounding the terms of the UK’s proposed departure from the EU in March 2019.
“There remains a worrying risk of serious disruption to UK-EU flights from April 2019 unless a UK-EU bilateral (or transitional arrangement) is agreed in advance of September 2018.”
UK airlines are currently members of a pan-European flight zone but there are concerns that, unless a new deal is agreed before the UK officially leaves the EU next March, UK flights will be technically ineligible to land in the EU.
Chancellor Philip Hammond told MPs earlier this month that flights between the UK and the EU could be grounded post-Brexit in the “most extreme scenario.” Ryanair is also reportedly going to warn passengers booking in advance that their tickets may become invalid.
Ryanair said on Monday that airlines need to know by mid-2018 what arrangements will be as that’s when they publish their summer 2019 schedules.
“We believe the UK government continues to underestimate the likelihood of flight disruptions to/from the UK,” Ryanair said.
The latest Brexit warning came as Ryanair published strong third-quarter results. The airline was hit by a pilot rostering crisis in September that forced it to cancel thousands of bookings and ground planes.
Despite this, profits rose by 12% to €106 million in the three months to the end of December and passenger numbers rose by 6% to 30.4 million.
CEO Michael O’Leary said in a statement: “We are pleased to report this 12% increase in profits during a very challenging Q3.
“Following our pilot rostering failure in September, the painful decision to ground 25 aircraft ensured that punctuality of our operations quickly returned to our normal 90% average. Our “Always Getting Better” customer service programme, coupled with 4% lower fares, stimulated 6% traffic growth to 30.4 million at an industry leading 96% load factor.”
Ryanair recently agreed to begin recognising pilot unions for the first time and O’Leary said this “will not alter our cost leadership in European aviation, or change our plan to grow to 200 million traffic p.a. by March 2024.”
But Neil Wilson, an analyst with ETX Capital, says in an email on Monday morning: “Full-year profit guidance is maintained in a range of €1.40 billion to €1.45 billion, however, this depends entirely on unions playing nicely. There is a decent chance they won’t, as management itself suggests, so investors may be justified to be sceptical that management can achieve this level. Or it may just be under-promising now so it can over-deliver later.
“For 2019, they are even more cautious. There is no visibility on fares and management is not as optimistic for summer fare rises.”
Ryanair also announced a €750 million share buyback plan. Ryanair shares have opened down 3% in London.