Ryanair (RYAAY, $96.04) Lowers Profit Expectations -- Are Rivals Milking The Opportunity?
Ryanair is cutting its profit projections, as the European low-cost airline struggles with flight cancellations, fuel costs and staff strikes.
It announced profit forecast for the current fiscal year in the range of €1.1 billion ($1.27 billion) to €1.2 billion ($1.39 billion) – which is around €150 million ($174 million) lower than the company’s previous expectation. September saw several flight cancellations of the airline and therefore less traffic, which in turn seems to have spiraled into even less demand for its flights as customer apprehensions probably got aggravated. Spike in fuel costs further pressured margins for the company.
As for cabin crew strikes - something it's been facing since December 2017 - the airline has yet to settle disputes with union officials in countries such as Spain, Portugal, Germany and Belgium. But it has had managed to reach agreements with pilots in Ireland and Italy.
Probably adding to Ryanair’s woes is rival EasyJet’s claims on Friday that the latter is benefiting in some ways out of Ryanair’s problems. However, EastJet also expressed concerns about higher fuel costs and staff pay deals of its own.
