Ryanair to cut flights and fares after profits warning

Low-cost airline Ryanair is to reduce its flying schedules and cut fares this winter after seeing its profit hopes dented by growing headwinds.

The Dublin-based carrier said increased competition and Europe’s continued economic problems were having an impact on fares and the amount of money it makes per passenger.

It said it will respond to the weaker outlook by selectively reducing its winter season capacity and rolling out lower fares and “aggressive” seat promotions in markets including the UK.

The strategy will cut its annual traffic forecast by 500,000 to 81 million while profits will be at the lower end of its previous forecast of between €570m and €600m.

The update caused its shares to slide 14%, while Luton-based rival easyJet dropped 7% in the FTSE 100 Index. Thomson Holidays owner TUI Travel and British Airways parent firm International Airlines Group were 4% lower.

Today’s warning comes a month after chief executive Michael O’Leary said July’s heatwave in northern Europe impacted on demand.