Ryanair in line for highest yearly profit after Q3 boost
Ryanair is on target to deliver its highest annual profits ever after posting a near €15m profit in the traditionally loss-making third quarter of its financial year.
The airline smashed analyst expectations after recording revenue of €844m for the three months to the end of December -- up 13pc on the corresponding quarter in the previous financial year.
The airline had been expected to record almost a €16m loss for the quarter.
But even as the airline boosted its full-year profit outlook from €440m to €480m, chief executive Michael O'Leary said the performance in the last quarter was being compared with an atrocious third quarter for the industry in 2010, when a freezing winter across Europe sparked flight delays and cancellations.
The latest guidance hike is the second since November.
Speaking to the Irish Independent, Mr O'Leary confirmed that the airline was on target to match its previous full-year profit record. That was in its 2007 financial year, when it posted an after-tax profit of €481m.
The performance in the latest quarter came as Ryanair's average fares rose 17pc, as its average sector length -- the average distance each flight travels -- rose 7pc in the period. Its unit costs rose 11pc as fuel prices rose. Excluding fuel, unit costs fell 1pc.
Ryanair's fuel costs jumped nearly 18pc in the last quarter to €333.6m and the carrier has warned of "significant cost challenge" for its next financial year as its annual fuel bill jumps by €350m, based on current prices.
Mr O'Leary said there was nothing the airline could do to address that. Ryanair has 90pc of its fuel requirement for the first half of its next financial year hedged and 70pc of the second-half requirement.
"We basically start off the next financial year at a minus €350m level, but it's a bigger problem for other carriers such as Lufthansa and British Airways," he said.
Ryanair carried 2pc fewer passengers during the last quarter, but it has grounded about 80 aircraft this winter in order to restrict capacity and avoid higher costs during the typically loss-making season.
Mr O'Leary said some of those 80 aircraft would be brought back into service following the collapse of Spanair last week. He said that Ryanair wouldn't ground as many aircraft next winter -- probably around 60 or 70 -- even as its fleet grows to about 305.
He also said that Ryanair wouldn't make a final decision until after the summer on paying another special €500m dividend to shareholders. He said it would be a "bit optimistic" to assume it would be paid in the current calendar year. He also ruled out a special dividend in 2014. Share buybacks could continue, however.
Shares in Ryanair closed up just under 1pc in Dublin at €4.19 yesterday.