Ryanair raises full-year trading expectationsPosted: February 2, 2015
Ryanair is planning the next big upgrade of its mobile app for April as it seeks to build on its ‘always getting better’ passenger proposition.
The disclosure came as the Irish low-cost carrier announced a net profit of €49 million for the three months to December 31 against a loss of €35 million in the same period a year earlier.
Traffic grew by 14% to 21 million passengers as the average fare rose 2% to €40. Revenues were up by 17% in the three months to €1,132 million while unit costs fell 6%.
Load factors rose six percentage points to 88%, with the ‘always getting better’ initiative and an expanded winter schedule highlighted as important factors in the rise.
Traffic in the airline’s fourth quarter to March is expected to grow by 25% but average fares will fall by as much as 8% as cheaper prices are used expand the network and develop business schedules.
“We have noticed a softening in prices for forward bookings during the first weeks of January,” chief executive Michael O’Leary admitted.
Despite this, the airline raised its full-year net profit guidance from €810 million-€830 million to €840 million-€850 million as lower oil prices bring down costs by 5%.
O’Leary predicted that carryings would hit 100 million in 2015/16, meaning that Ryanair would become the first EU airline ever to carry that number of passengers in one year.
The landmark figure – up from 90 million in the current financial year – is expected as the carrier marks its 30th anniversary with a number of events and special promotional fares.
The airline said its Ryanair Labs technology team is working to identify and deliver “exciting new services” for passengers to be introduced this year following Amadeus becoming its latest GDS partner in October.
“Ryanair’s Business Plus service and our high frequency winter schedules between many of Europe’s major business cities are now visible to travel agents and corporate travel departments across Europe, making it easier for business customers to substantially cut their travel budgets while enjoying the reliability of Ryanair’s industry leading on-time performance and customer service,” O’Leary said.
He declined to be drawn on British Airways owner International Airlines Group’s ongoing attempt to take over Aer Lingus, in which Ryanair has a near 30% shareholding.
“Since Ryanair has received no formal approach, or offer for our shares in Aer Lingus, we will not engage in any speculation about this proposal, other than to restate our position which is that the board of Ryanair will carefully consider any such offer, should one be received, from IAG or any other party, in due course.” O’Leary said.
He described new winter routes and bases as “performing well”.
“Our significantly expanded winter schedule, which includes more primary airports, city pairs and business friendly frequencies has converted millions of new customers to flying Ryanair,” added O’Leary.
“As our new aircraft delivery programme gathers pace, we are now able to capitalise on significant growth opportunities that are available to Ryanair’s low fares across Europe,” he said.
“Our new routes team are meeting with existing and new airports to finalise allocations of our growing fleet for the winter 2015 schedule. As many primary airports suffer capacity and traffic cuts from Europe’s flag carriers, the growth incentives being offered to Ryanair continue to improve.”
The carrier is to pay a €520 million special dividend on February 27 and the airline plans a €400 million share buy-back over a six month period from February 12 “in light of improved profitability and cash flows”.
Ryanair has taken advantage of recent dips in oil prices to further extend it fuel hedges into 2017.
“If current rates continue this would deliver an indicative reduction in our fuel cost per passenger of approx. 8% in full year 2016 and approximately 16% in full year 2017,” O’Leary said.
“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 expectations will be modest in full year 2016.”
Sourced by Travel Weekly