Pound sterling slide sees Ryanair cut its earnings forecast for 2017

Sterling hit a new six-year low against the euro on Monday.

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The Independent Online

Ryanair has cut its forecast for full-year profits, blaming the sharp drop in the value of the pound after the UK voted to leave the EU.

Sterling has lost almost a fifth of its value against the dollar since the referendum in June and is the worst-performing currency in the world this year. It has continued to face pressure since a “flash crash” two weeks ago saw it take a 6 per cent hit in two minutes.

The pound also hit a new six-year low against the euro on Monday.

Ryanair, cut its profit forecast for the year by 5 per cent down on its previous guidance to €1.3bn (1.17bn) – €1.35bn (£1.22bn) range. 

Michael O’Leary, the chief executive of Ryanair and a vocal advocate for the Remain campaign in the run-up to the referendum, warned that the new guidance was conditional on the pound remaining at current levels.

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He said: “We would caution that this revised guidance remains heavily dependent upon no further weakness this year in fares or sterling from its current levels.”

Aside from the hit from the falling pound, Ryanair said it was performing well. The company expects to carry 119 million passengers this financial year, up 12 per cent on the previous year.

Airlines are facing a slew of pressures, from terror attacks in Sharm el-Sheikh, Paris and Brussels, as well as more recent events in Nice and Turkey, which put people off travelling abroad. Currency and consumer issues affecting Brexit add to this stress.

Earlier this month, rival easyJet warned that the weakened pound would cost it £90m in the current financial year. It blamed the fall in the value of the pound, which was making jet fuel more expensive.

Carolyn McCall, easyJet chief executive, said the airline was facing “one of the most difficult periods in years”.

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