Ryanair warns of job losses and reduces profit guidance
Published on Monday, November 4, 2019
Ryanair’s share price rose 3% in early trade today despite the airline narrowing its profit guidance and warning of job losses.
The airline blamed the 737 MAX delays for the job cuts, saying it will be forced to cut or close a number of loss making bases this winter.
“We continue to work with our people and their unions to finalise this process,” it said.
Reporting an unchanged first half profit of €1.15 billion, Ryanair has narrowed full year profit guidance to €800m to €900m, down from its previous range of €750m to €950m.
Looking forward, the airline said: “Our outlook for the remainder of the year remains cautious. We try to avoid the unreliable optimism of some competitors.”
But Steve Miley, a senior market analyst at www.asktraders.com, said despite Ryanair’s challenges, investors were impressed by the figures.
“To say that it’s been a tough first half for Ryanair would be an understatement,” he said.
“The budget airline has had to grapple with pilot strikes, Brexit uncertainty hitting consumer demand, currency headwinds and rising risk of further delay to its Boeing Max 737 aircrafts.
“Despite the challenges, revenue increased by 11% to €5.39 billion on the back of a 10% growth in passenger numbers and 18% jump in revenue from ancillaries. Investors were impressed by the figures with the share price jumping over 3% in early trade, as it continues to fly higher from August’s low.
“Investors are taking Boeing Max 737 problems in their stride. Deliveries of the MAX 737 are expected to be lower than initially expected in March, with rising possibility of delay. Growth at the airline is expected to take a hit again next summer as the airline will carry around 5 million fewer customers than planned. This hasn’t dented demand for the shares this morning.”