Ryanair dives after it warns fare wars could hit profits

Shares in Ryanair fell more than 3% today after the Irish no-frills airline sounded the alarm over fare wars among airlines and disruption from Brexit.

The budget airline spooked investors by saying it could cut fares by as much as 9% this year to fill planes, potentially hitting profits.

Ryanair added: “The cost gap between Ryanair and competitor airlines continue to widen.”

The shares fell 60 cents to €17.56, and rivals’ stocks were also dragged lower.

Shares in easyJet lost 33.35p to 1278.65p, while British Airways parent IAG dropped 12.5p to 577.5p.

Neil Wilson, senior market analyst at ETX Capital, said: “Investors are worried that overcapacity will hit fares, reducing profits and margins in the second half.”

Ryanair repeated its plea for clarity from the government on the details surrounding Britain’s exit from EU, and warned it could move its planes out of the UK if no post-Brexit aviation deal is done in good time.

Finance chief Neil Sorahan said: “The clock is absolutely ticking.”

Ryanair is also considering buying struggling Italian airline Alitalia and has “put in a non-binding bid”, Sorahan said.

Profits soared 55% to €397 million (£356 million) in the first quarter, significantly helped by the later timing of easter.

Traffic grew 12% to 35 million, with Spain, Portugal and Italy continuing to be popular with holidaymakers.