Ryanair reports record profit but warns on Brexit impact

Inside Ryanair plane

Inside Ryanair plane

Net profits banked six percent higher to €1.32billion in the group's financial year to March 31, compared with €1.24billion last time around, Ryanair said in a statement.

Passengers increased 13 per cent to 120 million, bolstering profit despite a 13 per cent drop in fares.

It said fares would fall by between 5% and 7% in the year to the end of March 2018.

A combination of "security events" and weak sterling saw Ryanair's full-year revenue growth slow last year, despite which the budget airline forecast a modest increase in profit growth for the year ahead.

Ryanair added that its Board has approved a further 600 million euros share buyback.

However, that guidance had been lowered in October from a range for between €1.375bn to €1.425bn. It grew revenues by 2 per cent to €6.54 billion. Its punctuality fell to 88 per cent, from 90 per cent the previous year.

O'Leary said the increase in profits for the year to the end of March had been achieved "despite hard trading conditions", including a series of security events in Europe, a sharp decline in sterling and the switch of charter capacity from north Africa, Turkey and Egypt to mainland Europe.

Improvements to its website and mobile technology have boosted ancillary income, the Irish-based carrier says, as passengers continue to benefit from tranche of improved options such as "Plus" products, reserved seating, priority boarding and security fast-track options. It said much of the increase in profit should come from a projected EUR70 million fall in fuel costs.

Chief executive Michael O'Leary said fares had fallen 13%, but profitability had doubled over three years.

The carrier has been growing aggressively in Germany, where Air Berlin PLC is retrenching, and is a major player in Italy, where flag carrier Alitalia has entered the equivalent of bankruptcy protection.

Ryanair shares rose 1.2 percent to 17.97 euros at 10:30 a.m.in Dublin, taking its gain over the last 12 months to 28 percent.

"In the absence of such certainty, or direction, we will continue to pivot our growth away from the U.K.", Ryanair said.

As fears on how Brexit will affect the Open Skies agreement in Europe remain unknown, it is clear now that Ryanair is going to continue to expand their operations around Europe to help them cope with what the airline if referring to as potential "significant disruption" for flights between the United Kingdom and Europe.

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