|Massive losses warning hammers Ryanair shares
Shares in Ryanair slumped after Europe's top budget airline issued a new, harsher profits warning and pledged to maintain heavy fare discounts to keep aircraft full.
Stock in the Dublin-based carrier fell 11.5 percent to 5.40 euros, a two-month low.
Ryanair had issued an initial, milder profits warning September 4 citing weaker-than-expected demand and the need to reduce the average price of fares. Today's forecast means the airline is on course to record its first major drop in profits following two decades of industry-leading expansion.
Chief executive Michael O'Leary said projected profits for the fiscal year 2014 would fall to a range of 500 million euros to 520 million euros, reflecting expected heavy losses in the weaker winter months.
Ryanair had previously said profits would grow to up to 600 million euros for the 2014 fiscal year, following net profits of 569 million euros last year. O'Leary cited declining demand across Europe as the sole reason for the weakened outlook.
He said Ryanair would keep seats filled by lowering fares an average 9 percent in the current quarter and potentially more in the first quarter of 2014.
Ryanair's first-half results offered no surprises. Sales for the April-September period rose 5 percent to 3.26 billion euros as the airline carried 49 million passengers, a 2 percent gain. Net profits rose 1 percent to 602 million euros.
The forecast means Ryanair expects to record second-half losses of up to 100 million euros.—AP