LONDON — Budget airline Ryanair announced a 55% jump in profits for the quarter ending 30 June, but warned Brexit may lead to flight disruption and cancellations.
“We are pleased to report this 55% increase in PAT [profits after tax] to €397 million, but caution that this outcome is distorted by the absence of Easter in the prior Q1,” said CEO Michael O’Leary.
The increase is “due to a strong April (boosted by Easter) offset by adverse sterling, lower bag revenue as more customers switch to our two free carry-on bag policy, and yield stimulation following a series of security events in Manchester and London,” he said.
With regard to Brexit, Ryanair said it hoped the UK will remain in the EU Open Skies agreement. Failing this, the report notes, there may not be the sufficient time or “goodwill on both sides” to negotiate a replacement agreement, which could result in flights being disrupted for a time post-Brexit.
If the lack of clarity persists into autumn 2018, Ryanair warned they may have to cancel flights and move some or all their fleet out of the UK to mainland Europe.
“We have contingency plans in place and will, as always, adapt to changed circumstances in the best interests of our customers and shareholders,” the report says.
The company said it expects annual profits to be in the region of €1.4 billion, but this is contingent on Brexit developments and the absence of further terror attacks, as well as more standard variables such as the number of people booking summer holidays.
The news follows budget airline easyJet’s announcement earlier this month that it is planning to open a new EU hub to protect itself from changes prompted by Brexit and the uncertainty surrounding future UK-EU aviation agreements.
Ryanair also said its new Frankfurt base, which opened in March, is performing well and will be expanding its fleet later in the year. The company plans to launch two new European bases later in the year: “We continue to see significant growth opportunities for Ryanair across Europe as competition bases or move capacity and legacy airlines restructure,” it said.