Shares in Ryanair (LON:RYA) fell on Monday after the airline posted a loss for the third quarter.
While the number of passengers rose to 32.7m from 30.4m in the same period as a year prior, average fares fell and costs rose, driving a €19.6m loss for the period.
Ryanair joins a list of airlines facing rising costs and overcapacity that are ultimately eroding margins.
Much of the rise in costs was attributed to higher fuel costs and staffing. Brent Oil touched $85 a barrel in the period, but has since dropped back to around €65 a barrel which is likely to provide some relief in the current quarter.
Ryanair are locked into a race to the bottom on prices with average fares falling beneath €30. Despite the drop in average fares, overall revenue rose 9% to €1.53bn as ancillary services such as priority boarding helped the top line.
Michael O’Leary, Ryanair CEO, commented on the results:
“While a €20m loss in Q3 was disappointing, we take comfort that this was entirely due to weaker than expected air fares so our customers are enjoying record low prices, which is good for current and future traffic growth. While ancillary revenues performed strongly, up 26% in Q3, this was offset by higher fuel, staff and EU261 costs.”
On Brexit, Ryanair said the ‘risk of a “no deal” Brexit remains worryingly high’ and that they had taken a number of step to secure routes and imposed shareholder restrictions on investors from outside of the EU to ensure the group remained ‘EU-controlled;.
Shares in Ryanair (LON:RYA) fell over 4% in early trade on Monday, briefly touching €10.83.
The Ryanair share price has nearly halved in just 18 months after reaching intraday highs of €19.78 in August 2017.