Budget airline Ryanair says it will still make billion-pound profit in spite of cancellation debacle

Even at the lower end of guidance, that would represent a 7.7 per cent increase on last year.

As it reported first half profit before tax had grown 10 per cent to €1.4bn, Ryanair revealed it would take a €25 million (£22m) hit from September’s flight cancellation fiasco.

READ MORE: Ryanair crisis hits thousands of Scottish passengers

The episode effected 700,000 passengers and saw punctuality at Europe’s largest airline dive to 70 per cent. Ryanair cancelled 2,100 flights in September and October, and followed this by grounding 25 aircraft for five months, from November.

This led to the suspension of all flights operated by the airline from Scotland to London. Glasgow to Las Palmas and routes from Edinburgh to Hamburg and Szczecin in Poland have also been scrapped until March.

The “material failure” in pilot rostering, which left Ryanair with crew shortages, has led the airline to “address the competitiveness” of how much its pilots are paid.

Mr O’Leary said pilots based out of Stansted had been offered a new deal worth £135,600. But accounts show that in a secret ballot, pilots rejected this deal, which Ryanair said was 20 per cent higher than that offered to pilots at Norwegian.

Ryanair has disputed claims from Norwegian that it has poached 140 pilots from Ryanair this year alone.

“This rostering failure has challenged us to address the competitiveness of our pilot pay, as well as pilot concerns about communications, career progression and basing,” said Mr O’Leary. “While our pay was already slightly higher than Boeing 737 competitor airlines, we could have responded sooner to a tightening market for experienced F.O’s [first officers] with pay increases for our experienced pilots.”

If a deal is reached with all crews, Ryanair said it would cost up to €100m in a full year.

While the discussions with its pilots will continue, Mr O’Leary also warned that without progress on a deal with Brussels, Brexit could bring “serious disruption” to flights between the UK and the European Union in 2019.

Mr O’Leary, a vocal supporter of the campaign for the UK to remain part of the EU, said: “There remains a worrying risk of a serious disruption to UK-EU flights in April 2019 unless a timely UK-EU bilateral is agreed in advance of September 2018.

“We, like other airlines, need clarity on this issue before we publish our summer 2019 schedules in mid-2018 and time is running short for the UK to develop a bilateral solution.”

Mr O’Leary said he was worried that the UK Government “continues to under-estimate the likelihood of such a flight disruption to/from the UK”.

Addressing the collapse of three European airlines in recent months – Monarch, Air Berlin and Alitalia – Ryanair said there were “other financially troubled EU airlines who will, we believe, follow them.”

The airline is responding by pursuing growth in Germany and Italy.

“These trends, particularly where they allow high fare airlines like Lufthansa, BA and Air France to acquire local competitors, while constraining capacity and raising prices, can only be good for Ryanair’s yield and traffic growth,” said Mr O’Leary.

Mr O’Leary said the 11 per cent growth in passenger numbers to 72.1 million in the six months to September “reinforced the robust nature” of the group’s business model as it dealt with the pilot roster fiasco.

“Prior to this event, we were on track to deliver strong H1 results during which we opened three new bases and 80 new routes,” said Mr O’Leary.

Ryanair said its guidance remained dependent on second-half bookings, the absence of any further security events, strikes or negative Brexit developments.