Shares in Ryanair slumped in Dublin trade after the airline said it expects its full year results will be at the lower end of its net profit range of €570m to €600m.
In a trading statement, Ryanair said that while it remains comfortable with its first half year guidance, recent weakness in forward yields into the third quarter suggests that there will be no upgrade to full year guidance.
The airline's chief executive Michael O'Leary said that Ryanair had noticed its late bookings in July had been at weaker than expected yields due to the heatwave in Northern Europe and weaker sterling/euro exchange rates.
''The booking pattern returned to some normality in August, which will ensure that our H1 guidance remains unchanged, which is for a small increase in H1 profits over the prior year H1 comparable,'' he added.
However, Mr O'Leary said that in recent weeks the airline has noted a ''perceptible dip'' in forward fares and yields into September, October and November.
He said this is due to increased price competition and some capacity increases in the UK, Scandinavia, Spanish and Irish markets, the continuing effect of austerity and weak economic conditions across Europe and weaker sterling/euro exchange rates.
''We will respond to this lower yield outlook by selectively reducing our winter season capacity, thereby cutting our full year traffic target from over 81.5m to just under 81m,'' the airline boss said.
Shares in the airline closed 13.3% lower in Dublin on the back of the news, ending the day just below €5.87. Shares in Aer Lingus were also lower, losing 5.8% of their value to close at €1.58.
Airlines across Europe have been struggling with weak economies, high fuel prices and costly fleet upgrades. While Ryanair has fared better than most thanks to its focus on low prices, it faces competition from other airlines looking to win business in the budget segment of the market.
The last time Ryanair warned that profits would be at the bottom of a previously guided range was 2009, while it last issued a full profit warning in 2004.