* FY profit to be at bottom or below 570-600 mln euro range

* Analysts had forecast profit of around 645 mln euros

* Ryanair sees weak autumn in European aviation; shares fall

* To respond with “aggressive seat sales” (Adds investor comment, updated shares)

By Conor Humphries

DUBLIN, Sept 4 (Reuters) – Europe’s biggest budget airline Ryanair could miss its annual profit target for the first time in a decade, it said on Wednesday, blaming lower demand across the continent and a weaker currency in its largest market, Britain.

Shares in the Irish group, which has routinely beaten profit forecasts in recent years, dropped as much as 15 percent to a five-month low, dragging down other airline and travel stocks.

While some indicators suggest Europe’s economy is starting to emerge from years in the doldrums, Ryanair said there had been a noticeable dip in bookings for the coming months. It also blamed a weaker sterling for hitting demand and lifting costs in Britain, where it makes about a quarter of revenues.

“I have no doubt that the market will be weaker than the industry is expecting over the next couple of months and we are going to respond to that by being out there first and being aggressive with pricing,” Chief Executive Michael O’Leary said.

Analysts said it was too early to know whether the weakness was specific to Ryanair or a broader industry problem.

“Ryanair’s rivals certainly haven’t indicated they have seen this kind of weakness, though Ryanair has a history of calling things early,” said Davy Stockbrokers’ Stephen Furlong.

At 1542 GMT, Ryanair shares were down 11 percent at 6.028 euros, posting the biggest fall by a European blue-chip stock and dragging the European transport and leisure index down 1.6 percent. Rival easyJet fell 5.1 percent while tour operator TUI Travel was off 3.2 percent.

But Barry Norris, chief investment officer at Argonaut, one of the airline’s top 20 institutional investors, dismissed talk of a serious downturn in previously robust industry trends and said the announcement appeared to be aimed at starting a price war to discourage weaker competitors from running more flights.

“Ryanair management clearly believe that short-term shareholder pain will result in longer-term gain. As such we have been buying shares today, believing that the … fall in the shares is an overreaction,” Norris told Reuters.

SOURCE REUTERS Read more..