Ryanair slipped into the red at the end of last year after intense competition forced it to cut fares across Europe, and reiterated that Brexit could drag down full-year profits.
Chief executive Michael O’Leary described the third-quarter loss of €19.6m (£17.1m) as “disappointing,” but said it was entirely due to a 6% decline in air fares.
Lower fares prompted the Irish budget airline to cut its full-year profit forecast in mid-January for the second time in four months, to between €1.0bn and €1.1bn.
It said on Monday: “We cannot rule out further cuts to air fares and/or slightly lower full-year guidance especially if there are unexpected Brexit and/or security developments which adversely impact fares for close-in bookings between now and the end of March.”
Ryanair said the risk of a no-deal Brexit was “worryingly high”. It has obtained a UK licence to protect its three domestic routes and will place restrictions on shareholders in the event of a hard Brexit to ensure it remains an EU owned and controlled airline.
Europe’s biggest low-cost carrier carried 32.7 million customers in the three months to 31 December, up 8%, and revenues rose 9% to €1.5bn. Ancillary revenues, which include inflight sales, reserved seating, priority boarding and car hire, climbed by 26% but this was offset by higher fuel, staff and customer compensation costs following strikes.
The carrier said it “did not share the recent optimistic outlook of some competitors that summer 2019 air fares will rise”.
A number of smaller rivals have collapsed in recent months while Flybe, one of Ryanair’s main rivals on British regional routes, accepted a cut-price £2.2m rescue bid from a consortium led by Virgin Atlantic as it tries to avoid becoming insolvent.
Following the acquisition of the loss-making Austrian carrier Laudamotion, Ryanair said it would reorganise its group structure with a small senior management team overseeing four airline subsidiaries. It has extended O’Leary’s contract until July 2024.