Ryanair Says a Drop in Profits Is Coming

Jan 18, 2019

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Ultra-low-cost carrier Ryanair has issued a revised outlook for its yearly profits. The airline is citing overcapacity in the European market and lower-than-expected winter fares. The company says winter fares are now expected to fall 7%, a huge increase over the previous estimate of 2% drop.

We have certainly seen low-cost carriers struggle in the last few months. Wow, Norwegian and FlyBe have all seen their share of issues. While Wow Air and FlyBe have sought out partners or been acquired to help deal with their issues, Ryanair hasn’t reached that level just yet. The airline’s issues are much more centered around labor strikes than its profit margins.

Even with the revised profit statement, Ryanair is still expecting to make around $1 billion in after tax profit in 2019. Ryanair’s CEO Michael O’Leary did take time to say that other airlines could be in trouble because overcapacity will continue pushing fares even lower.

Irish airline Ryanair's CEO Michael O'Leary poses during a press conference on June 27, 2017 in Rome. Low-cost giant Ryanair is ready to make a bid for a majority stake in Italy's Alitalia if administrators of the troubled carrier undertake four key reform steps, its CEO said today. / AFP PHOTO / FILIPPO MONTEFORTE (Photo credit should read FILIPPO MONTEFORTE/AFP/Getty Images)
Irish airline Ryanair’s CEO Michael O’Leary. Photo by FILIPPO MONTEFORTE/AFP/Getty Images

Being the largest carrier in the market segment surely helps. Customers continue to take advantage of Ryanair’s crazy low fares despite all of the reports of unhappy customers, terrible customer service, and the airline being ranked the worst in Europe for the last six years running — maybe that’s why its passengers drink so much. It would seem for Ryanair customers all of that’s outweighed by its super cheap fares. A quick look at a few routes with the carrier turned up the following fares:

  • Berlin(SXF) to Milan(BGY) $17
  • Dublin(DUB) to Amsterdam(AMS) $28
  • Athens(ATH) to London(STN) $26
  • London(STN) to Rome(CIA) $25

While those fares are insanely low, you will want to be sure to check Ryanair’s Optional Fees. There are 27 separate fees listed. While some fees like extra leg room or snagging a seat in the front of the plane will run you a reasonable $8, some other fees might surprise you. Lost your boarding pass at the airport? You can get another one printed airside for a mere $28. Want to check in at the airport? You can for the king’s ransom of $62. It’s obvious that the carrier makes a large chunk of its profits from fees. Something you should be aware of if you book a flight with Ryanair.

H/T: Sky News

Featured photo by Manuel Queimadelos Alonso/Getty Images.

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