Bad weather brings loss for Ryanair
Budget airline Ryanair has reported a loss for the final three months of last year after it was forced to cancel more than 3,000 flights.
Chief executive Micheal O'Leary said the carrier had been expecting to break even in the third quarter but reported a net loss of 10.3 million euro, compared with a deficit of 10.9 million euro in the previous year, as strikes and severe weather grounded its aircraft.
However, a 15% rise in average fares to 34 euro, a surge of 20% in ancillary revenues, such as in-flight sales of refreshments and entertainment, and a 6% hike in passenger numbers helped offset the impact of strikes in Europe and heavy snowfall in the UK.
The airline faced a 37% rise in its third-quarter fuel bill but Mr O'Leary said the group was on course to hit full-year net profits at the upper end of its forecast range of between 380 million euro and 400 million euro.
Mr O'Leary said: "This small third-quarter loss of 10 million euros is disappointing, as we were on track to break even, but earnings were hit by a series of air traffic control strikes in the third quarter, compounded by a spate of bad weather airport closures in December."
Mr O'Leary added that the 3,000 flight cancellations in the third quarter compared with 1,400 in the whole of the previous fiscal year.
He said that, although oil prices had risen significantly in recent months, the airline's "fuel hedging strategy" was continuing to pay off, with 90% of fourth-quarter fuel bought at a reduced rate.
Mr O'Leary said he was surprised that recent commentary on the Irish economy had clouded analysis of Ryanair. He said: "Ryanair has little exposure to the Irish economy."
In light of the adverse weather disruption, the chief executive took the opportunity to hit out at European regulations which require airlines to compensate passengers during widespread cancellations.
He said: "It is inequitable that airports enjoy a boost to their restaurant and retail revenues from stranded passengers when their runways close, yet the airlines are obliged to pay for meals, drinks and hotels, when these cancellations are outside our control."