Irish budget airline Ryanair posted a 21 per cent drop in earnings for the three months through June amid a slump in fares that the company said is set to extend through the rest of the summer.
Net income fell to €243 million (Dh993m) in the fiscal first quarter, Ryanair said on Monday. Increases in non-ticket revenue are helping to offset the decline and the company stuck with its full-year guidance, according to Bloomberg.
Ryanair said fares would fall by 6 per cent in its key summer season this year, in part due to overcapacity in Germany and Brexit fears in the United Kingdom, Reuters reported.
It retained its profit forecast for the year to March 31, 2020 of between €750m and €950m, compared to a forecast of €832 m in the analyst poll.
Shares of Europe's largest low-cost airline have almost halved in value in two years as the company grappled with overcapacity in Europe, Britain's plans to leave the European Union and, most recently, delays in delivery of the Boeing 737 Max.
Ryanair earlier this month halved its growth targets for next year due to delays in deliveries of the 737 Max. On Monday, it said it expected the first deliveries in January at the earliest.
The airline said its fares in the three months to the end of June declined 6 per cent from a year earlier and said it expected a similar fall for the remainder of the summer. Average fares for the year to end-March 2020 will be towards the lower end of its guidance range of minus 2 per cent to plus 1 per cent, it added.
Ryanair's shares closed on Friday at €10.02, almost half their peak of €19.39 hit two years ago.
The airline is one of Boeing's biggest customers and was due to have 58 737 Max jets in time for its 2020 summer season. But it now expects to receive only 30 by then in that period.
Ryanair's chief financial officer, Niall Sorohan, said the timing of plans by its pilots in the UK and Ireland to ballot for possible industrial action in August was "unusual", given concerns around the Max and Brexit, but said the airline was open to talks.