Ryanair warns Boeing grounding is hurting business

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Shares of the airline, whose board has approved a 700-million-euro share buyback over the next 9 to 12 months, traded nearly 6% lower at the time of writing in London.

Ryanair Holdings PLC (LON:RYA) shares nosedived on Monday after predicting flat profits for its 2020 financial year as pressure from lower fares contributed to a profit slide in its latest full year.

Average fares for the full year to March 2020 are likely to be between 2 per cent lower and one per cent higher than last year, he said.

Profit for the fiscal year 2019 declined 39 per cent to €885m, and the company said earnings could decline further.

Profit including Lauda's exceptional losses this year was €880 million.

"As previously guided, Ryanair (excluding Austrian low-priced airline Lauda) reports a full year after tax profit of 1.02 billion euros (£890 million)", said Mr O'Leary.

Ryanair, Europe's largest low-priced operator, had already signalled a sharp fall in profitability due largely to overcapacity in two warnings a year ago.

Ryanair continues to have "utmost confidence" in Boeing 737 MAX, but is postponing the delivery of its first five MAXs at least until the winter of 2019, based on the condition that the USA manufacturer manages to gain back EASA's trust by the time.

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"Assuming revenue per passenger (RPP) growth of three per cent, we are guiding broadly flat group profits", said a Ryanair statement.

"This guidance is heavily dependent on close-in peak summer fares, H2 prices, the absence of security events, and no negative Brexit developments", management said.

"Times are tough for the travel industry", he said.

Ryanair, Europe's biggest low-priced airline, said the grounding of Boeing 737 Max jets and continued weakness in fares will trim its annual profit for this fiscal year.

China is the first country that suspended the commercial operations of all Boeing 737 Max jets following the Ethiopian Airlines crash on March 10, which killed all 157 people on board.

"We continue to have utmost confidence in these aircraft", Mr O'Leary said in a boost to the troubled Boeing model.

Despite its disappointing set of annual results, Ryanair approved a €700m share buyback which will commence later this week and run over the next nine to 12 months.

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