Ryanair issues second profit warning in four months

Ryanair has lowered it forecasts for full-year profits for a second time in four months blaming a drop in air fares due to competition in a crowded European market.

The guidance has been lowered from between €1.1bn - €1.2bn, to a new range of €1.0bn - €1.1bn.

Ryanair's profit warning came after another budget carrier, Norwegian Air, said on Wednesday that it would axe a number of routes and shut several bases as it seeks to cut costs.

The airline had previously expected fares would fall 2pc.

Last year, Ryanair booked profit of 1.45 billion euros (£1.2 billion) and the downgrade represents the second warning in quick succession.

Europe's largest low-priced airline now expects profit after tax for its financial year to March 31 - excluding start-up losses at its Laudamotion unit - of between €1 billion and €1.1 billion.

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He 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.

In October the airline said profits would be knocked by a spate of crew strikes and rising fuel prices.

The guidance excludes exceptional start-up losses in Lauda, which have been cut from €150m to €140m on the back of better than expected unit cost performance during the winter period.

The lower fares have, however, been partially offset by stronger than expected annual traffic growth - now expected to grow by 9% to 142 million passengers - slightly better than expected unit costs and stronger ancillary sales.

"We believe this lower fare environment will continue to shake out more loss-making competitors, with WOW, Flybe, and reportedly Germania for example, all now for sale".

More detail will be provided with third quarter figures on 4 February, Ryanair said.

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