Irish airline Ryanair has reported a decent rise in first-quarter profits not least due to growing traffic and reduced fuel costs. But future earnings look set to be impacted by the aftermath of the UK's Brexit vote.
Image: picture-alliance/dpa/T. Frey
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Europe's No. 1 budget carrier on Monday reported a 4-percent rise in its first-quarter profit to 256 million euros ($280 million).
"Ongoing market volatility arising from terrorist events and repeated strikes, particularly in France, weakened fares on close-in bookings and caused almost 1,000 flight cancellations."
Ryanair said its Q1 traffic increased by 11 percent, while average fares fell by 10 percent in the same quarter.
Ryanair discovers service
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Looking to strengthen EU business
But the carrier was able to offset lower fares as unit costs dropped by 9 percent and fuel costs fell by 42 million euros to 518 million euros.
The Irish airline said the recent UK vote to leave the European Union was "both a surprise and a disappointment." It added it expected the result of the vote to lead to a protracted period of political and economic uncertainty in both the UK and the EU.
In the near term, Ryanair said it would brace itself for a weaker pound and downward pressure on fares until the end of 2017 at least.
The airline added it would pivot its growth away from UK airports and shift more of its operations to Ryanair's EU hubs over the next two years.
hg/sri (Reuters, dpa)
Bye-bye, UK! We're leaving…
British businesses had repeatedly warned about the potential negative economic consequences from Brexit. And following the British vote to leave the EU, some firms are now considering relocating their operations.
Image: picture-alliance/dpa/W. Kumm
Vodafone
The second-biggest mobile telephone company in the world is considering the possibility of moving its headquarters out of the UK following Brexit. Should Vodafone decide to relocate, Düsseldorf could emerge as a top contender to host the head office. Vodafone already has a presence in the German city, where it employs about 5,000 people. Moreover, Germany is the company's largest market.
Image: Getty Images/AFP/M. Hayhow
Ryanair
Europe's biggest low-cost airline is officially based in Ireland, but a substantial portion of its fleet has so far been stationed in the UK. However, it is all set to change now, with Ryanair announcing that it would no longer station its aircraft there. The carrier also said it would no longer operate flights out of the UK.
Image: picture-alliance/dpa/M. Scholz
Easyjet
Europe's second-largest low-cost airline is based in London. But for how long? "That remains to be seen," said CEO Carolyn McCall during a TV interview this week. Easyjet is one of Europe's most profitable companies.
Image: Getty Images/AFP/F. Guillot
Virgin
Richard Branson is one of UK's most renowned business personalities. With regard to Brexit, he said: "Britain is heading for an economic disaster." His Virgin conglomerate has lost a third of its value since the British EU referendum vote. Brandon has urged the government to call a second EU referendum.
Image: Getty Images/AFP/D. Leal-Olivas
JPMorgan Chase
The biggest US bank employs 16,000 people in London. It is now mulling over plans to relocate a part of its British-based operations out of the UK. CEO Jamie Dimon had said prior to the referendum that between 1,000 and 4,000 jobs could be moved out of the City in the event of a Brexit.
Image: Getty Images/C.Gillon
Visa
The credit card company will probably have little choice but to downsize its activities in the UK, leading to the slashing of hundreds of jobs. According to EU guidelines, the company must maintain a data center in an EU country. And that is likely to mean an end to the company's data center in London.
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Ford
Ford has repeatedly said the UK is a "key market" for the company in Europe. Ford's plant in Dagenham also supplies parts and engines to the firm's production sites in Germany. After the British decision to leave the EU, the company said it would take all necessary measures to remain competitive on the market.
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Jaguar Land Rover
Not all companies are pessimistic, however. "We are British and we stand by the UK," says Adrian Hallmark, strategy chief at Jaguar Land Rover. There have been no changes in our business plans, Hallmark assured, while the UK remains a full member of the EU at least for the next two years.
