Ryanair has launched a €750m (£662m) share buyback and sought to reassure shareholders that it is equipped to remain Europe’s biggest low-cost airline after caving in to a unionisation drive from pilots.
Staff costs will increase by €45m this year as the Irish company lifts pay for its flight crews, and there may be further disruption to operations as the pilot dispute plays itself out, Ryanair said in a statement on Monday.
The carrier pledged to remain the most competitive in Europe, saying extra-dense Boeing 737 Max planes will help retain that advantage, reports The Telegraph.
“After 30 years of successfully dealing directly with our people it became clear in December that a majority of pilots wanted to be represented by unions,” said chief executive Michael O’Leary, adding that the decision to ground planes in order to cope with rostering issues that triggered the spat had been a “painful” one.
Ryanair was still able to boost net income 12 per cent to €106m in the third quarter ending Dec. 31, though Mr O’Leary said he was cautious about the final period of the year, with a chance of localised disruption and “adverse PR” as remaining union deals are finalised.
He said the carrier was “fully prepared to face down any such disruption” to defend its cost base.
Dublin-based Ryanair reiterated guidance for full-year net income between €1.4bn and €1.45bn, assuming an absence of labor upheaval. Analysts had predicted a third-quarter figure of €95.3m, based on six estimates.
The share buyback will commence this month and should be completed by the end of October, the company said.
While rival easyJet took a positive view on fares last month, Ryanair said it expects prices to fall at least 3 per cent in 2018, and urged extreme caution about trends over the peak summer months.
