Ryanair Profits Slide 8% Amid Falling Fares

Ryanair has seen an 8% drop in full-year net profit, its first decline for five years.

The airline said earnings for the 12 months to the end of March were €523m (£425m), down from €569m (£465m) a year earlier.

The company had previously warned of its full-year profit forecast, saying intense competition and falling fares in the sector was to blame.

The no-frills airline said it expected a boost in revenue from the coming summer market.

In early trades shares in its key competitor easyJet were up, so too were shares in the owner of British Airways, IAG.

Chief executive Michael O'Leary said: "While disappointing that profits fell 8% to €523m due mainly to a 4% decline in fares, weaker sterling, and higher fuel costs, we reacted quickly to this weaker environment last September by lowering fares and improving our customer experience which caused H2 traffic to grow 4% as load factors rose 1%."

It saw a 17% rise in "ancillary revenue" on costs associated with non-seat items, such as food and drink.

After a series of complaints against Ryanair, the firm amended its ancillary pricing structures last year, including the introduction of allocated seating and a reduction in some baggage charges.

A quarter of its revenue now comes from ancillary charges.

It also expects to carry 84.6 million passengers this financial year, up 4%, amid a forecast 2% rise in fares.

Ryanair remains "very cautious" about the second half of the year, after the lucrative summer trading period ends.

It expects to boost passenger capacity by 6% in the H2 period.

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