Ryanair’s profit forecast faces pressure as the airline cuts fares

Ryanair chief executive, Michael O'Leary, hinted on Wednesday that the airline's forecast that it would make about €1.4 billion in the current year could come under pressure as it slashes air fares in coming months.

The Irish carrier is sticking with a forecast given in May that it would make between €1.375 billion and €1.425 billion in the the 12 months to the end of March, its financial year.

Speaking at its annual general meeting in Dublin on Wednesday, Mr O’Leary, said that it remained “cautious” guidance. “But it’s subject to downward pressure,” he stressed.

Ryanair expects winter air fares to be 10 per cent to 12 per cent lower than last year as it cuts prices to fill extra seats and to counter consumers’ concerns at travelling in the wake of disruption and terror attacks.

Mr O’Leary said recently that it might have to review its guidance if fares were to fall by more than 12 per cent.

Chief financial officer, Neil Sorahan, noted after the meeting that advance bookings for the last three months of 2016 were 1 per cent ahead of this time last year.

“If we were to see more terrorist events then that would be a downward risk to guidance,” he said.