Ryanair PLC’s (LON:RYA) profits this year will grow 5 percentage points less than expected due to sterling’s fall following Brexit.
Michael O'Leary, the airline's chief executive, said sterling revenues account for 26% of its income and the 18% fall in the value of the pound since 23 June will weaken second half yields by slightly more than expected.
Higher load factors, stronger traffic growth and better cost control will help offset these weaker revenues, he added, but having previously forecast a 12% rise in profits this year, it now only expects a 7% increase.
Guidance is for €1.3-1.35bn for the year to March 2017 compared to €1.375-€1.425bn previously..
Income from fares will fall by between 13% to 15% in the second half of the year, as opposed to 10% to 12%, though lower costs will help to offset this said O’Leary.
The number of customer carried is expected to rise to 119m, up 12%.
Rival Easyjet PLC (LON:EZJ) warned earlier this month that the fall in the pound had cost it £35mln in “adverse exchange rate movements” since June 23, to take its currency hit to £90mln in the year ended September.
Shares in Ryanair rose 2.5% to €12.10, while easyjet gained 4% to 903p.