IT HAS been a turbulent year for airlines in Europe. A slowdown in the growth of demand for air travel across the continent has hit both passenger volumes and fare levels. Last month, Europe’s two biggest low-cost carriers, Ryanair of Ireland and easyJet of Britain, slashed their profit forecasts following the post-referendum fall in the pound. Average fares in Europe could drop by as much as 15% year-on-year this winter as airlines try to keep planes full.
Yet earlier today, Ryanair’s results for the six months ending September took investors and analysts by surprise, and in a good way. In spite of fares falling by a tenth, post-tax profits increased 7% to €1.17bn ($1.29bn) compared with the same period last year. Revenues, too, were up slightly. Although the airline has been hit by Brexit, it says it will respond by shifting capacity growth next year from Britain to countries such as Germany, Italy and Poland.
Although this is all good news for travellers wanting to fly around Europe at the lowest possible cost, traditional full-service outfits should be worried by Ryanair’s ebullient mood. Ryanair has traditionally focused on…Continue reading