Ryanair posts record annual profit, pessimistic on year ahead

Europe’s largest low-cost carrier booked a record €1.45 billion profit after tax in its financial year to March 31, up 10 percent year-on-year. (Reuters)
Updated 21 May 2018
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Ryanair posts record annual profit, pessimistic on year ahead

DUBLIN: Ryanair posted a record annual profit on Monday as it brushed off a rostering mess-up that forced it to cancel flights and sparked a dispute with pilots, but warned profits would fall back in the coming year due to higher costs and no fare growth.
Ryanair canceled 20,000 flights in September as an emergency measure to free up enough standby pilots to ensure the smooth operation of its fleet of 400 planes for the remainder of the year.
The cancelations sparked a wave of bad publicity and forced Ryanair to cut its growth plans for the first time in years. It has insisted this is a temporary measure and its long-term growth target remains intact.
Europe’s largest low-cost carrier booked a record €1.45 billion profit after tax in its financial year to March 31, up 10 percent year-on-year and slightly ahead of an average forecast of €1.44 billion in a company poll of analysts.
However, it said it expected to make a profit after tax of between €1.25 billion and €1.35 billion for the coming financial year, lower than the €1.37 billion expected on average by the analysts forecast.
While Ryanair expects to grow traffic by 7 percent to 139 million passengers, up on the 138 million last forecast, unit costs are expected to rise by 9 percent due to higher staff and oil prices with revenue from ancillary products unlikely to grow fast enough to fully offset this and broadly flat fares.
“Our outlook for FY19 is on the pessimistic side of cautious,” Chief Executive Michael O’Leary said in a statement.
“Forward bookings are strong but pricing remains soft. While still too early to accurately forecast close-in summer bookings or H2 fares, we are cautiously guiding broadly flat average fares for FY19,” O’Leary said.
The pessimistic tone was in contrast to rival EasyJet, Europe’s second-biggest low-cost airline, which said last week that it expects profits to rise more than 30 percent this year as it benefits from strong travel demand and the collapse of some smaller rivals.
The Irish carrier averted the threat of widespread Christmas strikes by unilaterally recognizing unions in December for the first time in its 32-year history, but it has struggled to formalize relations in some countries.
It has warned it may face some disruption to flights during the summer months.


Philips to close its UK factory in 2020, with loss of 400 jobs

Updated 17 January 2019
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Philips to close its UK factory in 2020, with loss of 400 jobs

AMSTERDAM/LONDON: Dutch health technology company Philips said on Thursday it planned to close its only factory in Britain in 2020, with the loss of around 400 jobs, the latest firm to move manufacturing jobs out of Britain.
The move is part of a push by Philips to reduce its large manufacturing sites worldwide to 30 from 50, and a spokesman said the decision had no direct link with Britain’s decision to leave the European Union.
However, the company said in a statement that it had to “pro-actively mitigate the potential impact of various ongoing geopolitical challenges, including uncertainties and possible obstructions that may affect its manufacturing operations.”
The factory in Glemsford, Suffolk, produces babycare products, mainly for export to other European countries. Almost all its activities will move to Philips’ plant in Drachten, the Netherlands, which already employs around 2,000 workers.
“We have announced the proposal after careful consideration, and over the next period, we will work closely with the impacted colleagues on next steps,” said Neil Mesher, CEO of Philips UK & Ireland.
“The UK is an important market for us, and we will continue to invest in our commercial organization and innovation programs in the country.”
Once a sprawling conglomerate, Philips has transformed itself into a health technology specialist in recent years, shedding its consumer electronics and lighting divisions.
The firm has previously warned that Brexit would put Britain’s status as a manufacturing hub at risk.
Chief Executive Frans van Houten last year said that without a customs union — which has been ruled out by Prime Minister Theresa May — Philips would have to rethink its manufacturing footprint.
Britain is set to leave the EU on March 29, and politicians are at an impasse over how to do so after lawmakers overwhelmingly rejected May’s proposed withdrawal agreement on Tuesday.
Other firms have moved jobs out of Britain in recent weeks, sparking alarm among lawmakers that Brexit is impacting corporate decision-making.
Jaguar Land Rover has slashed UK jobs — mainly due to lower Chinese demand and a slump in European diesel sales — while Ford has said it will slash thousands of jobs as part of its turnaround plan.
While both decisions were driven by factors other than Brexit, each firm has also been vocal in warning of the risks of no-deal Brexit, where Britain leaves abruptly in March without a transition period.