Thursday 22 March 2018

Ryanair increases profit forecast


Ryanair has hiked its profit guidance as boss Michael O'Leary hailed a revamp designed to improve its image and attract business customers.

The budget carrier now expects an annual profit of 840-850 million euro, up from previous guidance of 810-830 million euro, but cautioned of "modest" growth in the following financial year.

Fares would be lower due to the oil price slump, though rivals who had bought less fuel in advance stood to benefit more.

Ryanair said net profit for the third quarter to the end of December was 49 million euro, up from a loss of 35 million euro in the same period a year before.

Investors were rewarded with a 400 million euro share buy-back programme while there will also be a 520 million euro special dividend. But shares, which recently hit an all-time high, fell 3%.

Mr O'Leary said: "These strong results confirm that our 'Always Getting Better' customer programme and expanded business schedule, coupled with our substantial fare and cost advantage over competitor airlines, is drawing millions of new customers to Ryanair."

The airline said low oil prices would help it shave costs in the current final quarter. Traffic should grow by 25% and average fares fall by 6%-8% as price cuts are used to help expand the network and boost business schedules.

Ryanair said some competitors would be "significant beneficiaries" from the lower oil price as they bought less of their fuel in advance in 2015/16, putting downward pressure on fares.

The group said analysts and investors should be "mindful of this likely increased price competition".

"As lower oil prices kick in over the next two years, Ryanair intends to pass on much, if not all, of these savings to our rapidly growing customer base in the form of lower fares and therefore our profit growth will be modest in FY16," it said.

Ryanair, which is this year celebrating its 30th anniversary, said passenger traffic in the third quarter grew 14% to 21 million with the average fare up 2% to 40 euro. Revenues grew 17% to 1.13 billion euro.

Load factors - a measure of how full aircraft are - rose from 82% to 88%, attributed to its "Always Getting Better" programme and expanded winter schedule.

The carrier had previously set out plans for new winter bases in Cologne, Gdansk and Glasgow. Today it said new winter routes and bases were performing well.

It will open three new bases in Bratislava, Copenhagen and Ponta Delgada in the Azores in March and April, which the airline said had seen "stronger than expected forward bookings".

Ryanair said it expected to carry 100 million customers in 2015/16, becoming the first EU carrier to do so.

Meanwhile, Ryanair said it had received no formal approach over its shares in Aer Lingus, following the announcement of a proposed takeover of the airline by British Airways owner International Airlines Group (IAG).

It reiterated that the board would "carefully consider any such offer, should one be received, from IAG or any other party, in due course".

Press Association

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