Ryanair (LON: RYA) posted its lowest annual profit reports in four years on Monday adding earnings could drop even more as European airlines engage in what CEO Michael O’Leary is calling “attritional fare wars.”
At first, shares tumbled 6%, briefly recovering after O’Leary, who is one of the developers of no-frills airline model in Europe, claimed that lower ticket prices and profitability during the past few years was a hit worth taking in order to achieve higher market share.
“Our strategy would be to keep adding capacity as quickly as we can in all the markets where we can,” said O’Leary, who became CEO of Ryanair in 1994. “Will it be painful for a year or two, yes it will. But will it shake out more of the competition, yes it will.”
Shares of Ryanair fell 3% at 10.46 euros, more than 40% lower from its highest mark of 19.39 euros in August 2017.