Ryanair Holdings PLC (LSE:RYA) caused ripples of worries across the budget airline sector after reporting a 46% fall in profits and saying that air-fares will be much lower this summer.
The airline said average airfares were down 15% in its first quarter to the end of June and boss Michael O'Leary (pictured) said he expects fares in the current key summer quarter to be "materially lower than last summer", having previously expected them to be flat or modestly up.
The Dublin-headquartered carrier reported a 10% increase in customers for the first quarter, but a 1% fall in revenue and an 11% rise in costs, leading to profit after tax falling 46% to €663 million.
Net profit of €360 million was significantly short of the consensus analyst forecast of €538 million.
Fares were lower in the three months to the end of June due partly to the absence of the first half of Easter which fell into March this year, and "more price stimulation than we had previously expected", said O'Leary.
Operating costs increased marginally ahead of traffic growth, as fuel hedge savings offset higher staff and other costs which were affected by Boeing delivery delays.