This morning Ryanair announced to the market that profits this year will grow by only 7%, down from 12% previously forecast. Those primarily due to the devaluation in the pound, which accounts for 26% of the airlines income, though Michael O’Leary, the aireliens chief executive said “While higher load factors, stronger traffic growth and better cost control will help to ameliorate these weaker revenues, it is prudent now to adjust full-year guidance”.
The companies profit guidance for the year to March 2017 is now set at €1.3-1.35bn, compared to €1.375-€1.425bn
Perhaps the market was expecting worse news, as shares in Ryanair rose 2.79% to €12.14, while Easyjet gained 3.66% to 905p. As reported earlier in the month, Easyjet issued a trading update in which it confirmed profits were being materially affected by the devaluation of the pound (https://riskybearinvesting.com/2016/10/06/easyjet-october-trading-update/). Perhaps this news acts as confirmation that all airlines are being affected, encouraging traders re-enter Easyjet after its recent battering/