Ryanair shares have fallen by more than 30% on the Dublin stock exchange following its warning that full-year profits would fall by up to 10% compared with last year because of lower average fares.
Ryanair shares were down €2.03 to €4.72 in Dublin this evening.
The airline this morning reported a 10% increase in underlying profits to €47.5m for its third quarter to the end of December. Adjusted earnings per share rose by 10% to 6.27 cent, while average fares declined by 10%.
'While we now expect after tax profits for the current year to dip slightly, our annualised profit margin will still be in excess of 20% and Ryanair will continue to be the world's most profitable airline by margin,' said chief executive Michael O'Leary in a statement.
Based on initial bookings for the early part of 2004, Ryanair said yields, or average fares, were now expected to decline by between 25% and 30% in the first three months of the calendar year compared with the same quarter of 2003.
This would reduce net profit before exceptional items for the full year by up to 10% from a net profit of €239m last year to around €215m.
O'Leary later told reporters in London that Ryanair's load factor - the proportion of seats filled - was likely to slip to 70% in January compared with 76% a year earlier.
Ryanair has been expanding aggressively, eating into the market share of the bigger airlines through its discounted fare strategy.
The latest results have been overshadowed by a European Commission probe into whether the airline received illegal state subsidies at its Belgian hub of Charleroi in what could prove to be a test case for the industry.
Ryanair brought forward the release of the results to avoid clashing with the Commission's expected announcement of its verdict on Charleroi next Tuesday.
Ryanair has repeatedly said it expects to earn less money per passenger carried as it cuts fares to fill the huge number of additional seats on its expanding network, while keeping costs under control.
