Ryanair first-half profits fall 7% after widespread strikes

low-cost pioneer Ryanair said its first half earnings fell seven percent after  after widespread strike action by pilots and cab
low-cost pioneer Ryanair said its first half earnings fell seven percent after after widespread strike action by pilots and cabin crew disrupted operations.

Ryanair's first half to September profits fell seven percent to €1.2 billion, the low-cost airline announced Monday, after widespread strike action by pilots and cabin crew disrupted operations.

In a statement, the Irish firm maintained its net profit estimate for its current financial year to March 2019 of €1.1-1.2 billion ($1.27-1.38 billion)—down 12 percent—owing to two pan-European strikes that forced it to cancel hundreds of flights.

Ryanair said this forecast—which it had cut earlier this month—reflected "higher fuel, staff and EU261 costs"—referring to EU legislation which mandates passenger compensation in cases of delays or flight cancellation.

"While ancillary revenues performed strongly, up 27 percent, these were offset by higher fuel, staff and EU261 costs," said CEO Michael O'Leary.

"Our traffic, which was repeatedly impacted by the worst summer of air traffic control disruptions on record, grew six percent."

Ancillary income—including revenue from food, drink and in-flight sales—grew 27 percent to €1.3 billion over the six months to September period.

A substantial factor in this increase was the change in the baggage system at Ryanair, which now requires passengers to buy priority boarding for the right to take a small suitcase inside the cabin.

Overall, the company registered an eight percent rise in revenue to €4.79 billion, but only 75 percent of Ryanair flights arrived on time in the first half, compared to 86 percent a year earlier.

Ryanair said it suffered from eight days of strikes over the summer.

"We worked well to minimise disruptions to our customers by operating over 90 percent of our schedules on each of these days," the firm said in its statement.

On Friday, Ryanair said it had reached agreements with more unions across Europe as it looked to avoid yet more action.

Ryanair pilots across Europe staged a 24-hour stoppage in September to further demands for better pay and conditions, causing chaos for tens of thousands of passengers.

In July, strikes by cockpit and cabin crew disrupted 600 flights in Belgium, Ireland, Italy, Portugal and Spain, affecting 100,000 travellers.

A major issue among staff based outside Ireland remains the firm's practice of using Irish legislation in employment contracts.

Employees say the status quo creates insecurity for them, blocking access to state benefits in their own countries.

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© 2018 AFP

Citation: Ryanair first-half profits fall 7% after widespread strikes (2018, October 22) retrieved 11 July 2020 from https://phys.org/news/2018-10-ryanair-first-half-profits-fall-widespread.html
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