Heatwave hits profits at Ryanair
Published 29/07/2013 | 08:42
Low-cost airline Ryanair is pinning its hopes on an end to the summer heatwave after passenger numbers were hit by the good weather amid plunging first-quarter profits.
The 21% fall in the carrier's bottom-line figure, blamed on soaring fuel costs, the timing of Easter and a French air traffic control strike, had been expected.
But chief executive Michael O'Leary said performance in recent weeks has also been slightly weaker, which is believed to be a result of the heatwave in northern Europe.
He said while full-year profits were expected to remain as expected, this was on the basis that the weakness did not continue.
Mr O'Leary said Ryanair's performance in the second quarter was still expected to improve, despite comparisons with the buoyant Olympic period last year. He said the airline's outlook remained cautious due to the recession and austerity measures, high fuel costs, and tax policies, but full-year traffic was expected to grow 3% to 81.5 million.
The airline's full-year profit after tax guidance remains at between 570 million euro and 600 million euro.
The airline's first quarter saw passenger numbers up 3% to 23.2 million and revenue rising 5% to 1.34 billion euro - partly as a result of reserved seating, priority boarding and higher admin and credit card charges. Revenue per passenger rose 1% but profit after tax fell 21% to 78 million euro.
Mr O'Leary said the airline's seven new bases in Eindhoven, Maastricht, Krakow, Zadar, Chania, Marrakesh and Fez were performing well. He said new routes and bases would be announced later this year to exploit cutting back by other European carriers, while the airline was in negotiations with the new owners of Stansted airport to increase traffic.
He also used the announcement to criticise a Competition Commission decision which may force it to sell down its stake in rival airline Aer Lingus.
There has been nervousness in recent weeks about the impact of the heatwave on airlines' performance, with hard-pressed passengers declining to shell out for a sunshine break abroad when they can top up on their tans at home.