The company, which openly campaigned for Britain to stay part of the EU, called the Brexit vote both a “surprise” and a “disappointment”, in a trading statement on Monday morning.
Ryanair said it will shift its strategy away from the UK while some clarity emerges on UK’s long term political and economic relationship with the EU.
“In the meantime, we will pivot our growth away from UK airports and focus more on growing at our EU airports over the next two years.
“This winter we will cut capacity and frequency on many London Stansted routes (although no routes will close) where we are already significantly ahead of our multiyear traffic growth targets,” the company said.
The airline said it was unable to predict the effect the vote to Leave the EU will have on its business and regulations.
But Ryanair predicted the Brexit vote will lead to a weaker sterling, slower growth in the UK and EU economies and downward pressure on fares, until at least the end of 2017.
However, it acknowledged it could create new opportunities, depending on post-Brexit new regulations.
“There may also be some opportunities if our UK registered competitors are no longer permitted to operate intra EU routes, or must divest their majority ownership of EU registered airlines.”
Transport stock slid in the week following the EU referendum as fears for the UK economy intensified after the UK’s shock decision to leave the EU.
Easyjet was one of the biggest losers on the FTSE 100 with shares closing down 22.32 per cent to 1,020p on Monday June 27.
The budget airline joined IAG, the owner of British Airways and Aer Lingus, in warning that a drop in travel demand and a slide in the value of the pound could hurt earnings for the rest of the summer.
Ryanair shares also fell by 13.9 per cent, following the EasyJet warning.
Ryanair’s announcement comes as it unveils its first quarter sales and profits. First quarter net income rose 4 per cent year-on-year to €256m (£213.7m), while revenue rose 2 per cent to €1.69bn (£1.41bn).
Customers increased by 11 per cent to 31 million.
6 ways Britain leaving the EU will affect you
6 ways Britain leaving the EU will affect you
1/6 More expensive foreign holidays
The first practical effect of a vote to Leave is that the pound will be worth less abroad, meaning foreign holidays will cost us more
2/6 No immediate change in immigration status
The Prime Minister will have to address other immediate concerns. He is likely to reassure nationals of other EU countries living in the UK that their status is unchanged. That is what the Leave campaign has said, so, even after the Brexit negotiations are complete, those who are already in the UK would be allowed to stay
3/6 Higher inflation
A lower pound means that imports would become more expensive. This is likely to mean the return of inflation – a phenomenon with which many of us are unfamiliar because prices have been stable for so long, rising at no more than about 2 per cent a year. The effect may probably not be particularly noticeable in the first few months. At first price rises would be confined to imported goods – food and clothes being the most obvious – but inflation has a tendency to spread and to gain its own momentum
4/6 Interest rates might rise
The trouble with inflation is that the Bank of England has a legal obligation to keep it as close to 2 per cent a year as possible. If a fall in the pound threatens to push prices up faster than this, the Bank will raise interest rates. This acts against inflation in three ways. First, it makes the pound more attractive, because deposits in pounds will earn higher interest. Second, it reduces demand by putting up the cost of borrowing, and especially by taking larger mortgage payments out of the economy. Third, it makes it more expensive for businesses to borrow to expand output
5/6 Did somebody say recession?
Mr Carney, the Treasury and a range of international economists have warned about this. Many Leave voters appear not to have believed them, or to think that they are exaggerating small, long-term effects. But there is no doubt that the Leave vote is a negative shock to the economy. This is because it changes expectations about the economy’s future performance. Even though Britain is not actually be leaving the EU for at least two years, companies and investors will start to move money out of Britain, or to scale back plans for expansion, because they are less confident about what would happen after 2018
6/6 And we wouldn’t even get our money back
All this will be happening while the Prime Minister, whoever he or she is, is negotiating the terms of our future access to the EU single market. In the meantime, our trade with the EU would be unaffected, except that companies elsewhere in the EU may be less interested in buying from us or selling to us, expecting tariff barriers to go up in two years’ time. Whoever the Chancellor is, he or she may feel the need to bring in a new Budget
Ryanair said that market volatility provoked by a string of terrorist attack and repeated industrial action, particularly in France, cause nearly a thousand cancellations.
The company maintained its full year guidance saying profits will rise by approximately 12 per cent between €1.375 billion and €1.425 billion.
However, Ryanair warned “that post Brexit there are significant risks to the downside during the remainder of the year.”