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Ryanair warns of flights disruption if no Brexit aviation deal is secured

A strong Easter helped Ryanair boost spring quarter profits by 55% but the airline maintained its full-year guidance amid concerns over Brexit which could force all UK-based aircraft onto the Continent.

Europe’s largest low fares carrier was helped in the three months to June 30 by the timing of Easter falling into April as after tax profits soared to €397 million as average fares rose by one per cent to just over €40 and passenger numbers went up by 12% to 35 million.

However, the first quarter performance was offset by adverse sterling, lower bag revenue as more customers switched to a two free carry-on bag policy and “yield stimulation” following the terrorism attacks in Manchester and London, according to chief executive Michael O’Leary.

After tax profits for the airline’s full financial year remain at between €1.40 billion-€1.45 billion, with annual passenger numbers forecast to grow from previous guidance by one million to 131 million.

“This guidance remains heavily dependent on close-in summer bookings, second half average fares, and the absence of any further security events, air traffic control strikes or negative Brexit developments,” O’Leary cautioned.

Looking forward, he added: “We remain concerned at the uncertainty which surrounds the terms of the UK’s departure from the EU in March ’19.

“While we continue to campaign for the UK to remain in the EU open skies agreement, we caution that should the UK leave, there may not be sufficient time, or goodwill on both sides, to negotiate a timely replacement bilateral which could result in a disruption of flights between the UK and Europe for a period of time from April ’19 onwards.

“We, like all airlines, seek clarity on this issue before we publish our summer 2019 schedule in the second quarter of 2018.

“If we do not have certainty about the legal basis for the operation of flights between the UK and the EU by autumn 2018, we may be forced to cancel flights and move some, or all, of our UK based aircraft to continental Europe from April ’19 onwards.
“We have contingency plans in place and will, as always, adapt to changed circumstances in the best interests of our customers and shareholders.”

He revealed that ancillary revenue continues to grow in line with traffic “as we discount pricing to drive penetration in products such as Ryanair Rooms, Ryanair Holidays and the PLUS bundles”.

Average fares are expected to fall by 5% over the April to September period as Ryanair expects to increase carryings by almost 11% but with checked bag revenue continuing to “steeply decline”.

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