Ryanair delivers profits upgrade
Ryanair's profit hopes continued to climb after December's benign weather helped the airline deliver a 13% rise in quarterly revenues.
With fewer planes in operation over the winter, longer routes and increasing ticket prices across the industry, Ryanair said its average fare was up by 17%, a figure which includes the impact of passenger luggage fees.
The Dublin-based operator reported better-than-expected profits of 15 million euro for the three months to December 31 and said the figure for the year to March 31 should now hit 480 million euro.
That is better than the 440 million euro predicted in November, which itself represented a 40 million euro upgrade on its previous estimate.
The quarterly improvement, which compares with widespread snow closures at airports during the previous December, came despite an 18% rise in fuel costs, which Ryanair said it offset by "aggressively" controlling costs.
However, it is braced for its fuel bill in the next financial year to increase by a further 350 million euro, which it warns will pose a "significant cost challenge".
It has paid for 90% of its fuel in the first half of the year at around 99 US dollars a barrel and at 100 US dollars for 70% of the second half.
The airline carried 17 million passengers in the quarter to December 31, a fall of 2%, but revenues were up 13% to 746 million euro. The profits figure of 15 million euro, compared with a loss of 10 million euro a year earlier.
The company has pulled 80 of its aircraft to reduce winter losses amid the soaring fuel prices and cut traffic by 2% over the quarter.
James Cooke, an analyst at Panmure Gordon stockbrokers, expects further profits growth after the figures came in ahead of expectations. He added: "Despite the tough market conditions, we expect average fares to rise strongly in the coming years, driven by a deceleration - and eventual standstill - in capacity growth and higher competitor fares."