Ryanair today blamed a lengthy series of issues for a 7% drop in first half profits to €1.20 billion and refused to rule out further base closures, winter capacity cuts and strike action.

Average fares fell 3% to under €46 in the six months to September 30.

This was due to excess capacity in Europe, an earlier Easter and repeated air traffic control strikes and staff shortages which caused a spike in cancellations of higher fare weekend flights, the airline said.

Higher fuel, staff and passenger compensation costs offset strong ancillary revenue growth in the period.

The airline also faced strikes by pilots and cabin crew.

Chief executive Michael O’Leary described 2018 as being “the worst year on record” for European air traffic control disruption, causing widespread damage to airline punctuality and schedules.

Ryanair’s on-time performance fell to 75% from 86% last year due to air traffic control strikes and staff shortages, he disclosed.

However, Europe’s largest budget airline saw passenger carryings rise by 6% to 76.6 million with revenue up by 8% to €4.79 billion.

O’Leary said: “As recently guided, first half average fares fell by 3%.

“While ancillary revenues performed strongly, up 27%, these were offset by higher fuel, staff and EU261 [compensation] costs.

“Our traffic, which was repeatedly impacted by the worst summer of ATC disruptions on record, grew 6% at an unchanged 96% load factor.”

Fares are expected to fall by a further 2% over the winter due to a “weaker than expected” October school half-term and Christmas.

The airline also faces a fuel bill €460 million higher than the same time last year plus steeper compensation costs.

A full year profit of between €1.10 billion and €1.20 billion is projected, as updated by the airline as it issued a profits warning on October 1.

O’Leary said: “This full year guidance remains heavily dependent on air fares not declining further – they remain soft this winter due to excess capacity in Europe – the impact of significantly higher oil prices on our unhedged exposures, the absence of unforeseen security events, ATC and other strikes and the impact of negative Brexit developments.”

He warned: “We cannot rule out further base closures or capacity cuts this winter if oil prices rise or air fares fall further.

“Winter trading may be positively impacted by the rate and timing of other airline failures which is already creating a ready supply of well trained pilots and cabin crew for summer 2019 growth.”

O’Leary cautioned that the risk of a no-deal Brexit in March 2019 was rising.

“While we hope that a 21-month transition agreement from March 2019 to December 2020 will be implemented and extended, we remain concerned that the time to complete such an agreement is shortening.

“In the event of a hard Brexit our UK shareholders will be treated as non-EU. In such an event the board will restrict the voting rights of all non-EU shareholders and confine them to selling shares only to EU nationals to ensure that Ryanair remains majority owned and controlled by EU shareholders.

“We have applied for a UK air operators certificate to protect our three domestic UK routes and are on track to receive it before the end of 2018.”

O’Leary admitted progress in reaching union recognition with cabin crew in Spain and Portugal and pilots in Germany had been slower than in other countries and accused competitor employees of interfering “to delay agreements with our people and their unions”.

“While we suffered a small number – just eight days – of limited strikes this summer, we worked well to minimise disruptions to our customers by operating over 90% of our schedules on each of these days, thanks in large measure to the efforts of the majority of pilots and cabin crew who did not support these disruptions and worked normally,” he added.

“Ryanair has shown over the past ten months that we can, and will, work with unions to reach fair and reasonable agreements for our people while retaining our competitiveness and efficiency.

“We can also manage strikes, although we do our utmost to avoid them. We will continue to negotiate and conclude union agreements over this winter.

“While we hope to finalise more union agreements in the coming months, we cannot rule out occasional industrial action, but we expect their impact to be very limited.”