What happened
Shares of discount European airliner Ryanair Holdings (RYAAY -1.09%) (LSE: RYA) shed 16.5% of their value on Monday, hurt by rising fuel costs and a damaging strike among employees in Belgium, Germany, Holland, Portugal, and Spain -- and the earnings warning that resulted from these events.
So what
Ryanair pilots in Germany, and Ryanair cabin workers elsewhere in Europe, called a one-day strike on Friday that disrupted the travel plans of more than 40,000 flyers and forced Ryanair to cancel some 250 flights .
A secondary consequence of the strikes was that Ryanair also had to roll back its forecast for this year's "fiscal 2019 " earnings. In an update issued today, the airline warned that full-year profit will probably land somewhere between 1.1 billion and 1.2 billion euros, or about 12% below the previous prediction of 1.3 billion euros. Should this prediction come to pass, it will also represent about a 20% decline in profits from last year's 1.45 billion-euro record haul.
Ryanair stock was grounded on Monday. Image source: Ryanair.
Now what
And even that may not be the worst news. Ryanair told Reuters it " [can] not rule out further disruption," which could further impact results and cause earnings to fall even further this year.
On top of that, rising oil prices -- a factor out of Ryanair's control -- are expected to reduce Ryanair's profits next year as well. Next year is fiscal 2020 for the Irish airline, and profits could fall by 3.5% for every 1% rise in the cost of jet fuel, according to London-based Goodbody Stockbrokers .
Little wonder investors are heading for the exits.
