Ryanair cuts annual profit forecast due to weaker pound

Ryanair, Europe's leading low-cost airline, cut its annual profit forecast by five percent on Tuesday due to the impact of the plunging pound.

In a statement, the airline said it reduced its full-year net profit guidance by 5 percent from a previous range of 1.375 billion euros(1.51 billion U.S. dollars) and 1.425 billion euros to a new range of 1.3 billion euros and 1.35 billion euros.

It said the primary cause of this slightly lower growth in full-year profitability is the 18 percent fall in the pound against the dollar after Britain's vote to leave the European Union.

It added fare prices may drop by between 13 percent and 15 percent.

However, the airline said these lower fares will be partly offset by a better than expected cost performance.

It now expects full year ex-fuel unit costs to decline by 3 percent compared to previously guided 1 percent. It also expects full year load factor to be 1 percent better than guided at 94 percent.

The airline said its full-year traffic will increase to 119 million, which is 12 percent growth on last year's 106 million customers.

It warned the revised guidance remains heavily dependent upon no further weakness in air fares in the second half of the year or sterling from its current levels.

"As Ryanair will continue to be load factor active and price passive throughout the winter season at these low prices, there has never been a better time for customers to book or fly with Ryanair," Ryanair's CEO Michael O' Leary said. Endit