By Padraic Halpin
DUBLIN (Reuters) - Ryanair cut its forecast for full-year profit for the second time in three months on Friday, this time blaming lower than expected winter fares, and said it could not rule out a further downgrade if Brexit causes unexpected developments.
Shares in the Irish-based carrier fell on the news and hit the stock prices of rivals such as EasyJet as Ryanair said short-haul overcapacity in Europe had led to fare cuts.
Europe's largest low-cost airline now expects profit after tax for its financial year to March 31 - excluding start-up losses at its Laudamotion unit - of between 1 billion euros ($1.14 billion) and 1.1 billion euros, compared to a previous estimate of 1.1 billion euros to 1.2 billion euros.
The airline had originally forecast profits of 1.25 billion to 1.35 billion euros before October's profit warning took account of a series of strikes across Europe during the summer that hit traffic and bookings, but have since subsided.
The new range would represent a 24-31 percent fall from the record 1.45 billion euro post-tax profit Ryanair booked in its most recent financial year.
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Its shares, which in recent weeks have fallen to their lowest level in four years, were 2.3 percent lower at 0820 GMT, after initially falling more than 5 percent.
EasyJet shares were 2 percent lower, while Lufthansa and Wizz Air were down 0.7 percent to 1.1 percent respectively.
Ryanair's profit warning came after another budget carrier, Norwegian Air, announced on Wednesday that it would axe a number of routes and shut several bases as it seeks to cut costs. In December Norwegian said it was struggling to fill its aircraft as capacity growth far outpaced demand.
Ryanair said its fares in the second half of its financial year were set to fall by 7 percent, rather than the 2 percent previously flagged.
The lower fares have, however, been partially offset by stronger than expected annual traffic growth - now expected to grow by 9 percent to 142 million passengers - slightly better than expected unit costs and stronger ancillary sales.
Ryanair Chief Executive Michael O'Leary said a further downgrade of the profit outlook was possible given uncertainty about the terms of Britain's planned departure from the European Union at the end of March.
"While we have reasonable visibility over forward Q4 bookings, we cannot rule out further cuts to air fares and/or slightly lower full year guidance if there are unexpected Brexit or security developments which adversely impact yields between now and the end of March," O'Leary said in a statement.
Still, the better than expected unit cost performance allowed the carrier to cut its projected start-up losses in Lauda to 150 million euros from 140 million.
O'Leary said the fact that the airline was passing on lower air fares to customers would continue to be good for Ryanair's traffic growth and business over the medium to long term.
($1 = 0.8774 euros)
(Reporting by Padraic Halpin in Dublin and Shashwat Awasthi and Noor Zainab Hussain in Bengaluru; Editing by Shounak Dasgupta and Susan Fenton)
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