Ryanair posted high profits for its third quarter despite flight disruptions.
Low-cost airline, Ryanair, registered a 12 percent increase in its third quarter, despite the mounting disruptions caused by the airline’s pilots. The Irish airline warned of possible disruptions in the following months and urged analysts to remain cautious of fare rises on European short-haul routes over the summer.
Ryanair claims it would return 750 million euros to shareholders through a share buyback as it was able to avert a widespread strike over Christmas by recognizing unions in December. The decision was a first in the airline’s 32-year history, however, it has struggled to formalize relations since.
Ryanair shares were down 3.25 due to concerns about further disruption.
The airline expects some localized disruptions and “adverse PR” urging investors to remain cautious as Ryanair finalizes union discussion.
Chief Executive, Michael O’Leary said that the airline is ready to face down other pilots who decide to form unions after the disruptions settle.
“We have some jurisdictions where we are getting…laughable demands for legacy-type inefficiencies,” O’Leary said. “Frankly we will never agree to those… if we have to take strikes or disruptions in those jurisdictions, then we will take those,”
Pilots complained of Ryanair’s toxic work environment and of a lack of trust between staff and management. They said that they will refuse any offer of a pay rise that doesn’t include assurances of other potential talks on pay and conditions.
Ryanair registered 106 million euros in profits after tax for the third quarter, slightly ahead of analyst forecasts of 101 million euros.
The disruption, on the other hand, cost Ryanair 25 million euros in passenger compensation. Pilot salaries are expected to cost about 45 million euros in the six months to the end of March.
Ryanair remains optimistic in its yearly capital, forecasting between 1.4 billion and 1.45 billion euros in its financial year. The estimate has remained unchanged since May and it seems it will remain so until March 31, when the financial year ends.
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