Ryanair saw full-year revenues and profits rise despite cancelling over 20,000 flights last year after mismanaging pilots’ annual leave.
The Dublin-based budget airline posted a 10 per cent rise in pre-tax profits to €1.45billion (£1.26billion) in the 12 months to the end of March.
Despite the impact of rostering-related cancellations in September and October last year, which affected 700,000 passengers, revenue rose 8 per cent to €7.15 billion (£6.25billion) as it flew more passengers.
Revenues boost: Ryanair said it carried 9% more passengers as it lowered its fares
Ryanair carried 130.3million people, a 9 per cent increase on the previous year, as it continued to lower its fares, which it said were down 3 per cent to an average of €39.40.
However, the carrier said costs had risen 1 per cent last year and warned that they would rise even higher in the coming year because of higher oil prices and higher staff costs.
Investors did not take much notice of the warning however, as shares rose 2.5 per cent to €15.90.
Ryanair boss Michael O’Leary said he was pleased with the results ‘during a year of overcapacity in Europe, leading to a weaker fare environment, rising fuel prices, and the recovery from our September 2017 rostering management failure.’
Neil Wilson, analyst at Markets.com, said Ryanair’s cautious outlook had to be taken with a grain of salt, since the company ‘has a habit of setting the bar rather low and then far exceeding it’.
‘Nevertheless, we are starting to see how unionisation and higher pay will affect margins,’ he added.
Ryanair expects total costs in the current financial year to be some 9 per cent more due to higher staff costs, which it expects to rise by almost €200million, and higher oil prices, which have risen to $80 a barrel.
The net result will be a fall in profits to between €1.25 billion and €1.35billion euros, Ryanair said.
Wilson added: ‘Rising labour costs are a problem for Ryanair’s low cost model: investors might just have to accept slightly lower margins going forward.’
Ryanair also warned UK shareholders about the potential impact of a ‘hard Brexit’ next year.
In that scenario, UK shareholders will be treated as non-EU and this could ‘potentially affect Ryanair’s licensing and flight rights’.
As a result, Ryanair intends to ‘restrict the voting rights of all non-EU shareholders in the event of a hard Brexit’, in order to ensure it is majority-owned and controlled by EU shareholders at all times.
‘This would result in non-EU shareholders not being able to vote on shareholder resolutions. In the meantime, we have applied for a UK AOC which we hope to receive before the end of 2018,’ the firm added.