Ireland's troubled Ryanair said Monday that quarterly net profits rose 12 percent despite a cancellations crisis, but warned Britain was under-estimating the risk of "serious disruption" to flights following Brexit. Profit after tax increased to 106 million euros ($132 million) in the group's third quarter, or three months to December, from a year earlier, the Dublin-based carrier said in a statement. Passenger numbers grew six percent to 30.4 million people.
In another boost, the group forecast passenger traffic would climb eight percent to 130 million for the full year which ends in March 2018. That was upgraded from previous guidance of 129 million.
And Ryanair also announced a 750-million-euro share buyback which will begin this month. "We are pleased to report this... increase in profits during a very challenging third quarter," said chief executive Michael O'Leary.
Investors seemed unmoved, with Ryanair shares down more than 3 percent in morning trading in Dublin. The outspoken boss once more acknowledged Ryanair's "pilot rostering failure in September".
Ryanair suffered a troubled end to 2017, being forced to cancel 20,000 flights through to March this year, mainly because of botched holiday scheduling for pilots. The results on Monday came one week after Ryanair signed an agreement to recognise the British Airline Pilots Association (BALPA), reversing its historic hostility towards trade unions.
This after the carrier said that its UK-based pilots had accepted pay increases of up to 20 percent. "It became clear in December that a majority of pilots wanted to be represented by unions," O'Leary said. "In keeping with our policy to recognise unions when the majority of our people wanted it, we have met pilot unions in Ireland, UK, Spain, Germany, Italy, Portugal, Belgium and France to discuss how we can work with them on behalf of our people. "We have successfully concluded our first recognition agreement with BALPA in the UK."
He added: "As we finalise union discussions along similar lines to that agreed in the UK, we expect some localised disruptions and adverse PR so investors should be prepared for same." Similar talks will be held with cabin crew unions.
The cancellations fiasco triggered pilots' demands for better working conditions and representation, with some departing for other carriers. As a result of pay hikes, staffing costs are set to jump by 45 million euros in the current 2017-2018 year.
And looking ahead to next year, total costs will rise as the fuel bill jumps by more than 300 million euros and the wage bill soars by another 100 million euros. Hargreaves Lansdown analyst Laith Khalaf said Ryanair was bracing for even more turbulence.