Share price fall wipes €1bn from budget airline's value as it promises to cut capacity and introduce 'aggressive seat sales'
Ryanair has admitted that disappointing bookings in recent months, particularly from cash-strapped UK travellers, has been caused by more than just the unusually hot weather across northern Europe, prompting the airline to warn full-year profits will be lower than hoped.
Six weeks after the chief executive, Michael O'Leary, blamed "the heatwave in northern Europe" for "slightly weaker" yields, Ryanair told investors that, despite "some normality" in August, the softening trend has returned.
O'Leary put this down to a number of factors including British travellers balking at the soaring cost of holidays in the eurozone; increased flight capacity and competition in the UK and Ireland; and the continuing effect of austerity measures in many still weak economies.
As a result Ryanair said full-year profits would be "at the lower end" of previous guidance of €570-600m (£480-505m).
Shares in Ryanair slumped 15% in early trading as investors reacted to the airline's reassessment of the current trading environment. Other airline groups also saw their shares drop in value.
Faced with a weaker than expected outlook for September, October and November, Ryanair said it would "selectively reduce" its winter season capacity, cutting its annual traffic target from more than 81.5m to just less than 81m.
While the figures disappointed Ryanair investors, they could result in some positive news for those planning a winter holiday. In a bid to restore flagging sales, O'Leary has pledged to introduce a range of lower fare and "aggressive seat sales" in four selected markets – the UK, Scandinavia, Spain and Ireland.
In a statement to the stock market, Ryanair said: "[We] remain confident that we will continue to hit our revised passenger targets albeit at lower fares and yields than originally expected."
Donal O'Neill, an analyst with Goodbody stockbrokers, said: "This is a surprise statement from Ryanair and comes contrary to some of the commentary from the peer group and indeed Ryanair's own commentary at its June investor days. The stock and sector will likely sell off heavily on the back of this news." Reported by guardian.co.uk 11 hours ago.
Ryanair has admitted that disappointing bookings in recent months, particularly from cash-strapped UK travellers, has been caused by more than just the unusually hot weather across northern Europe, prompting the airline to warn full-year profits will be lower than hoped.
Six weeks after the chief executive, Michael O'Leary, blamed "the heatwave in northern Europe" for "slightly weaker" yields, Ryanair told investors that, despite "some normality" in August, the softening trend has returned.
O'Leary put this down to a number of factors including British travellers balking at the soaring cost of holidays in the eurozone; increased flight capacity and competition in the UK and Ireland; and the continuing effect of austerity measures in many still weak economies.
As a result Ryanair said full-year profits would be "at the lower end" of previous guidance of €570-600m (£480-505m).
Shares in Ryanair slumped 15% in early trading as investors reacted to the airline's reassessment of the current trading environment. Other airline groups also saw their shares drop in value.
Faced with a weaker than expected outlook for September, October and November, Ryanair said it would "selectively reduce" its winter season capacity, cutting its annual traffic target from more than 81.5m to just less than 81m.
While the figures disappointed Ryanair investors, they could result in some positive news for those planning a winter holiday. In a bid to restore flagging sales, O'Leary has pledged to introduce a range of lower fare and "aggressive seat sales" in four selected markets – the UK, Scandinavia, Spain and Ireland.
In a statement to the stock market, Ryanair said: "[We] remain confident that we will continue to hit our revised passenger targets albeit at lower fares and yields than originally expected."
Donal O'Neill, an analyst with Goodbody stockbrokers, said: "This is a surprise statement from Ryanair and comes contrary to some of the commentary from the peer group and indeed Ryanair's own commentary at its June investor days. The stock and sector will likely sell off heavily on the back of this news." Reported by guardian.co.uk 11 hours ago.