Ryanair has warned rivals that it may cut its fares in late summer by as much as 9 percent from last year, triggering a share sell-off by investors concerned about the impact on profitability. As Ciara Lee reports, the company is also giving a stark warning about the impact of a ''hard Brexit''.
First quarter profits may be up 55 percent compared to last year. But Ryanair saw a share sell-off by investors concerned about profitability. Europe's biggest budget airline has helped drive down short-haul ticket prices in Europe by increasing capacity by 33 percent in the past two years. And says it could cut its fares in late summer by up to 9 percent from last year. Leaving its rivals feeling the heat. (SOUNDBITE) (English) NEIL SORAHAN, CHIEF FINANCIAL OFFICER, SAYING: "We see our competitors moving elsewhere when they typically see the Ryanair effect coming into an airport. We're growing by 11 percent this summer. We're going carry 131 million customers in this year. But the cost advantage that we have over everybody else is supreme. Ryanair is feeling less confident about Brexit though, issuing a stark warning over Britain's potential withdrawal from the EU Open Skies agreement. (SOUNDBITE) (English) NEIL SORAHAN, RYANAIR'S CHIEF FINANCIAL OFFICER, SAYING: " The clock is ticking down, and every day that nothing is done is a day getting closer to having to load our summer schedules for 2019. It now looks more likely it will be a hard Brexit. And in that scenario we would have to see bilaterals negotiated between the UK and the euro 27 well in advance of the end of March 2019. And if that doesn't happen then the possibility is that there could be no flights between the UK and Europe for a period of time." A situation which might allow other European cities to cash in. (SOUNDBITE) (ENGLISH) COMMERZBANK, GLOBAL FINANCIAL ECONOMIST, PETER DIXON SAYING: "The London airline sector is operating with very limited spare capacity. We've had a lot of discussion over the course of recent years about the expansion of London's Heathrow Airport. It could be that other airlines or other airports rather with more capacity would be able to pick up some of that slack." Ryanair says it will be increasing its presence in Germany this coming winter. Failure to reassure airlines over Brexit, could leave the UK out in the cold.