Investing.com - Shares in Ryanair, Europe’s largest low-cost airline fell sharply on Monday after it warned that annual profits are set to fall for the first time in five years.
Announcing half year results, the Dublin based carrier cut its profit forecast to approximately EUR510 for the fiscal year ending in March, down from its previous projection of EUR570 million, citing greater price competition and softer economic conditions across Europe.
Fares fell by 2% in the six months to September 2013, due to factors such as the “summer heatwave in northern Europe, French ATC strikes in June, and weaker sterling”.
"The continuing fare and yield softness means that full year profits will be lower than previously guided," Michael O'Leary, chief executive of Ryanair, said in a statement.
In September Ryanair issued a profit warning, saying profits for the year would be around EUR570 million, below the EUR600 million investors had been expecting.
Ryanair said it expects fares to continue to fall over the winter and said it will be grounding aircraft over the winter months to reduce capacity.
The airline reported a net profit of EUR602 million for the six months to September, an increase of 1% from a year earlier. Passenger numbers rose by 2% to 49 million.
Ryanair also said that it will introduce fully allocated seating on all flights from February 1 next year. It said the move was in response to “enormous demand” and was "part of the airline's commitment to listen to its customers".
Shares in Ryanair were down 11.48% to EUR5.40 in early London trading from a close of EUR6.10 on Friday.
Announcing half year results, the Dublin based carrier cut its profit forecast to approximately EUR510 for the fiscal year ending in March, down from its previous projection of EUR570 million, citing greater price competition and softer economic conditions across Europe.
Fares fell by 2% in the six months to September 2013, due to factors such as the “summer heatwave in northern Europe, French ATC strikes in June, and weaker sterling”.
"The continuing fare and yield softness means that full year profits will be lower than previously guided," Michael O'Leary, chief executive of Ryanair, said in a statement.
In September Ryanair issued a profit warning, saying profits for the year would be around EUR570 million, below the EUR600 million investors had been expecting.
Ryanair said it expects fares to continue to fall over the winter and said it will be grounding aircraft over the winter months to reduce capacity.
The airline reported a net profit of EUR602 million for the six months to September, an increase of 1% from a year earlier. Passenger numbers rose by 2% to 49 million.
Ryanair also said that it will introduce fully allocated seating on all flights from February 1 next year. It said the move was in response to “enormous demand” and was "part of the airline's commitment to listen to its customers".
Shares in Ryanair were down 11.48% to EUR5.40 in early London trading from a close of EUR6.10 on Friday.