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Ryanair warns over annual profits Ryanair warns over annual profits
(about 1 hour later)
Ryanair's annual profit is set to fall for the first time in five years.Ryanair's annual profit is set to fall for the first time in five years.
Europe's biggest discount airline says that profits for the financial year ending in March will be between 500m euros (£423m; $674m) and 520m euros, previously it had forecast profits of 570m euros. It now expects to make a profit of between 500m euros (£423m; $674m) and 520m euros for the financial year ending in March, down from its previous projection of 570m euros.
Ryanair has been cutting fares and is grounding aircraft over the winter to deal with the tough trading conditions. Europe's biggest discount airline said it expects fares to fall 10% over the winter months and is grounding aircraft to deal with the tough conditions.
It expects average fares to fall 10% over the winter months. Ryanair will also introduce allocated seating from February next year.
Softer conditions
The firm said that fares had been falling due to "increased price competition, softer economic conditions in Europe and the weaker euro-sterling exchange rate".The firm said that fares had been falling due to "increased price competition, softer economic conditions in Europe and the weaker euro-sterling exchange rate".
"The continuing fare and yield softness means that full year profits will be lower than previously guided," Michael O'Leary, chief executive of Ryanair, said in a statement."The continuing fare and yield softness means that full year profits will be lower than previously guided," Michael O'Leary, chief executive of Ryanair, said in a statement.
The warning came as the airline reported a net profit of 602m euros for the six months to the end of September, a rise of just 1% from a year earlier.The warning came as the airline reported a net profit of 602m euros for the six months to the end of September, a rise of just 1% from a year earlier.
It said it carried 49 million passengers during the period and generated a revenue of 3.26bn euros, up 5% from the same period last year.It said it carried 49 million passengers during the period and generated a revenue of 3.26bn euros, up 5% from the same period last year.
'Listen to customers'
Ryanair has enjoyed robust growth over the past few years as a global economic downturn saw many consumers turn to more affordable travel options.
However, the company said that "the next 12 months will see a brief pause in traffic growth".
Given the weak conditions in key markets and increased competition, the airline is looking to focus on improving its service in an attempt to retain customers and attract new ones.
It has announced a plan to introduce allocated seating from 1 February next year which will allow passengers to select seats on aircraft, as long as they check-in more than 24 hours prior to the date of departure.
The airline said the move will make "the boarding process smoother" and enable "families or other groups to ensure that they sit together".
It added that the return to allocated seating was in response to enormous demand and was "part of the airline's commitment to listen to its customers".
In recent weeks the carrier has also introduced measures such as allowing a small second carry-on bag and a 24 hour "grace period" to allow passengers to correct minor booking errors.