Ryanair Cancellations Prompt Slowest Passenger Growth Since 2014

(Bloomberg) -- Ryanair Holdings Plc's passenger growth advanced at the slowest rate since 2014 last year after it canceled thousands of flights to cope with a staffing crunch, sparking outrage among consumers and regulators.

The 2017 customer tally was 129 million, or 2 million less than initially forecast, according to a statement from Ryanair on Wednesday, with December's performance the worst in close to four years.

Ryanair scrapped 20,000 flights over the final quarter of 2017 and the first months of this year following a botched rescheduling of pilot leave prompted by changes in labor laws. Chief Executive Officer Michael O'Leary has been forced to accept unionization after the debacle gave crews increased bargaining power that led to the carrier's first-ever strike.

Ryanair's annual passenger gain slipped to 10 percent from 15 percent in 2016, while the December advance was just 3 percent, the least since March 2014, putting the brakes on the Dublin-based carrier's surge ahead of rivals.

Budapest-based Wizz Air Holdings Plc, Eastern Europe's biggest discounter, reported a 24 percent jump in its 12-month count to 28.3 million customers, up from a 19 percent jump in 2016. The Irish company still added more passengers at 12 million, versus 5.5 million at Wizz.

Ryanair's net income for the quarter ended Sept. 30 suffered a rare decline as it shelled out 25 million euros ($30 million) in refunds to more than 700,000 passengers hit by the cancellations, according to figures published Oct. 31.

O'Leary has stood by his forecast for net income of 1.4 billion euros to 1.45 billion euros in the year ending March 31. At the same time, he has cut the passenger forecast for 2018 by 4 million to 138 million customers.

Ryanair is due to meet with the Irish IALPA union representing its pilots Wednesday to hammer out details of a recognition agreement, according to comments last month when a preliminary deal was reached. The union has said it also aims to secure improved job security, terms, and working conditions.

Shares of Ryanair traded 0.9 percent higher at 15.17 euros as of 9:12 a.m. in Dublin, after gaining just 3.8 percent in 2017. Wizz, which more than doubled in value last year, was up 0.6 percent at 3,724 pence in London.

--With assistance from Richard Weiss

To contact the reporter on this story: Benjamin Katz in London at bkatz38@bloomberg.net.

To contact the editors responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net, Christopher Jasper, Tara Patel

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