Ryanair sees strong growth
Ryanair posted a strong set of third-quarter figures yesterday on the back of a surge in pre-Christmas bookings.
An 8 per cent rise in average fares lifted the carrier’s pretax profit to €18.1 million for the three months to December 31st, up 21 per cent on the same period last year.
Revenues rose by 15 per cent to €969 million as traffic grew 3 per cent to 17.3 million passengers. The airline said bookings from passengers in the UK, Germany and Scandinavia were “particularly robust”.
The airline’s better-than-expected numbers helped it absorb an €81 million hike in its fuel bill, due to rising oil prices.
The airline also raised its profit forecast to €540 million after tax for the year to March, which would represent a 7 per cent increase on last year.
“We saw strong demand out of the UK, out of Germany and out of Scandinavia and that has gone straight to our bottom line,” chief operating officer Michael Cawley said. “We are still struggling to understand it, to be honest.”
However, he acknowledged sales were not as buoyant in southern Europe, with Spain in particular “very weak” and fare growth in Italy flat.
Next year fares will continue to rise although capacity will likely only grow by 2-3 per cent in the financial year to March 2014, Mr Cawley said, down from the 4 per cent rise forecast in the current year, due to the lack of new aircraft deliveries.
He said the airline remained in “protracted negotiations” with Boeing about a large order. Excluding fuel, unit costs rose 4 per cent in the quarter due to increases in Italian air traffic control costs, Spanish airport charges and the strength of sterling versus the euro, the airline said.
Ryanair opened its 51st base in Maastricht in December and will open six more from April in Eindhoven, Krakow, Zadar in Croatia, Chania in Greece and Marrakech and Fez in Morocco.
The airline said it hoped to capitalise on significant capacity cuts by other carriers which would also offer it growth opportunities across Europe. Ryanair said it expected final-quarter traffic to drop by about 400,000, 3 per cent lower than 2012.
The airline said this was due to the planned grounding of up to 80 aircraft which limits the impact of high oil prices, high airport fees at Stansted and Dublin and seasonally weaker final-quarter demand.
“Demand is exceeding supply in the short-haul market and Ryanair is capitalising on it,” said Davy stockbrokers analyst Stephen Furlong. “The market will be very happy with these numbers.” Its chief low-cost rival EasyJet last week also posted strong results in the last quarter of the year, with revenue growth of 9.2 per cent.
Ryanair shares were trading at €5.54 in London yesterday, up 17 per cent since the beginning of the year.
Aer Lingus bid: O’Leary confident takeover will go ahead
Ryanair chief executive Michael O’Leary said yesterday he was confident European Union regulators would give the go-ahead for the airline’s proposed €694 million bid for Aer Lingus, adding he expected a response in early March.
“Ryanair has submitted a radical and unprecedented remedies package to the EU in support of its offer for Aer Lingus,” Mr O’Leary said.
“The remedies involve two upfront buyers each basing aircraft in Ireland to take over and operate a substantial part of Aer Lingus’s existing route network and short-haul business.” Ryanair currently owns 29.8 per cent of Aer Lingus. In June last year, it launched its third takeover attempt to acquire its rival at €1.30 per share.
Mr O’Leary said: “We believe these remedies address every current Ryanair--Aer Lingus crossover route and all other competition issues raised by the commission in its statement of objections.”
“We look forward to completing our offer for Aer Lingus subject to receiving approval from the EU competition authorities in early March,” he said.
In December, the Government, which holds a 25.1 per cent stake in Aer Lingus, rejected Ryanair’s bid, citing concerns about connectivity and Ireland’s competitiveness.
The EU blocked a takeover effort five years earlier, saying it would create a monopoly for Irish flights.