Ryanair profits fall 29% on weaker fares and higher costs

Ryanair has reported a 29% dip in annual profits to just over €1bn (£890m) as weaker fares and higher costs weighed on its bottom line.

The no-frills carrier reported on its progress as the sector navigates turbulence from rising fuel costs and stiff competition - headwinds that has seen the likes of Flybmi and WOW collapse in recent months.

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Ryanair said it had seen traffic growth of 7% over the year to 31 March - with revenues rising 6% to €7.6bn (£6.6bn).

But it also reported challenges from a 6% decline in fare costs and a fuel bill of €440m (£385m).

The company had previously guided it did not expect schedules to suffer an impact from the grounding of the Boeing 737 MAX fleet following two crashes that killed almost 350 people .

Ryanair has 135 of the planes on order.

The airline did say on Monday that it continued to have "utmost confidence" in the planes, which are awaiting global clearance to fly again following modifications to anti-stall software.

Ryanair said benefits to its fleet from the 737 MAX included 4% more seats, a 16% improvement in fuel efficiency and a reduction of 40% in noise emissions.

It said the updates needed to the planes meant it was now no longer expecting delivery of its first five aircraft until winter.

Ryanair said its guidance of "broadly flat" profits for the current year depended on a number of other factors including "no negative Brexit developments" and the fare price environment - particularly in the second half.

The company said: "Assuming revenue per passenger (RRP) growth of 3%, we are guiding broadly flat group profits.

"This will range from €750m (£660m) if RPP rises 2%, up to €950m (£830m) if RPP rises 4%.

The board also approved a €700m (£610m) share buyback scheme to run over the course of the next 12 months.

Commenting on the financial performance for 2018/19, chief executive Michael O'Leary said: "Short-haul capacity growth and the absence of Easter in Q4 (fourth quarter) led to a 6% fare decline, which stimulated 7% traffic growth to over 139 million.

"Ancillary sales performed strongly up 19% to €2.4bn (£2.1bn), which drove total revenue growth of 6% to €7.6bn (£6.6bn)."