Ryanair today lowered its full year profit guidance as the budget airline giant was hit by further turbulence.
The carrier blamed two days of co-ordinated strikes across Europe last month and a collapse in consumer confidence due to fears of further industrial action.
High compensation costs from strike action and increased fuel prices were also cited as the profits warning was issued.
Ryanair said annual profits were now projected at between €1.10 billion- €1.20 billion against €1.25 billion-€1.35 billion previously projected.
The airline is withdrawing a total of 11 aircraft from bases in Eindhoven, Bremen and Niederrhein.
Slower traffic growth in in the second half of the financial year will cut annual traffic by one million passengers to 138 million.
The airline also expects its fuel bill will be about €460 million higher than a previous figure of €430 million over last year.
Chief executive Michael O’Leary warned: “Ryanair cannot rule out further disruptions in Q3, which may require full year guidance to be lowered further and may necessitate further trimming of loss making winter capacity.”
He said: “While we successfully managed five strikes by 25% of our Irish pilots this summer, two recent coordinated strikes by cabin crew and pilots across five EU countries has affected passenger numbers (through flight cancellations), close in bookings and yields (as we re-accommodate disrupted passengers), and forward air fares into Q3.
“While we regret these disruptions, we have on both strike days operated over 90% of our schedule.
“However, customer confidence, forward bookings and Q3 fares has been affected, most notably over the Oct school mid-terms and Christmas, in those five countries where unnecessary strikes have been repeated.
“These strikes have also added to our EU261 costs while, at the same time, our unhedged fuel costs have jumped as oil prices rise to $82 per barrel which affects 10% of volumes, and all of Laudamotion’s fuel bill.
“Like a number of other EU airlines, we have decided to trim our winter 2018 capacity – by 1% – in response to this lower fare, higher oil and higher EU261 cost environment.”
He added: “Since Ryanair agreed to recognise unions in December 2017, we have made substantial progress with our union negotiations in major markets including Ireland, the UK, and more recently Italy, where we have signed multiyear CLA’s (collective labour agreements) with our pilots and cabin crew.
“Regrettably such progress has been impeded in Spain, Portugal, Germany, Holland, and Belgium where we’ve experienced interference in negotiations with our people and their unions, even when we offer them what they ask for (i.e. local contracts), in writing.
“When we have successfully negotiated agreements with unions in Ireland, the UK and Italy, and when we have offered local contracts and improved T&C’s to our people in Belgium, Holland, Germany, Portugal and Spain, it is clear that these disruptions are unnecessary, and ill-judged at a time when other airlines are also cutting winter capacity.
“Shareholders should note that the above guidance excludes start up losses in Laudamotion of approximately €150 million.”