Ryanair has warned of gloomy profit prospects after the budget airline had lower than expected airfares over winter.
The Irish carrier lowered its full-year post-tax profit guidance from between 1.1 billion euros - £966 million - and 1.2bn euros - £1bn - to a new range of 1bn euros - £878m - and 1.1bn euros.
Ryanair said that winter fares are expected to fall seven per cent, a much bigger drop than the previously guided fall of 2%.
It booked profit of 1.45bn euros, or £1.2bn, last year, and the downgrade represents the second warning in quick succession.
Read more: Kick lines up new deal as momentum builds
The airline said in October that profits would be knocked by a spate of crew strikes and rising fuel prices.
Ryanair boss Michael O’Leary also warned that he cannot rule out further downgrades to profit guidance.
The firm opened more new routes in Edinburgh after it closed its base at the airport and cut the number of routes there from 23 to three, although Glasgow later won back four routes last year.
Mr O'Leary, above, said: “There is short haul over-capacity in Europe this winter, but Ryanair continues to pursue our price passive/load factor active strategy to the benefit of our customers who are enjoying record lower air fares.
“While we have reasonable visibility over forward quarter four bookings, we cannot rule out further cuts to air fares and/or slightly lower full-year guidance if there are unexpected Brexit or security developments which adversely impact yields between now and the end of March.”
Read more: Hotelier finds lure of family firm too strong to stay away
However, the firm also expects stronger traffic growth of 9% to 142 million and stronger ancillary sales as more customers choose lower cost optional services.
Mr O’Leary said: “We believe this lower fare environment will continue to shake out more loss making competitors, with Wow, Flybe, and reportedly Germania for example, all currently for sale.”
Ryanair will release its third quarter results on February 4.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules here