Ash cloud hits Ryanair profit

Ryanair said it would meet its full-year profit forecast today despite quarterly profit falling 24 per cent as a result of disruption caused by the volcanic ash cloud.

Net profit for the quarter was €138.5 million, 1 per cent higher than last year, before excluding the €50 million in pre-tax exceptional costs arising from the closures of airspace in April and May.

Ryanair was forced to cancel about 9,400 flights over the period, losing 1.5 million passengers, and is in the process of processing claims from travellers under EU 261 regulations.

"Despite these volcanic ash disruptions Ryanair continues to increase traffic, yields, and profits, while most of our competitors are cutting capacity and reporting losses," chief executive Michael O'Leary said in a statement.

Once exceptional items were taken into account, the net profit figure fell back to €93.7 million.

Revenue was 16 per cent higher at €896.8 million as traffic rose 8 per cent and the average fare cost 5 per cent more. However, rising oil prices pushed fuel costs up by 34 per cent to €287 million.

Ryanair maintained its forecast for full-year net profit to rise by between 10 to 15 per cent to between €350 million and €375 million - a forecast which it last month said excluded the €50 million ash cloud charge.

"Our pre-volcano net profit figure currently sits above guidance at €391 million and we get good comfort from this statement on the yield (fare) progression," Goodbody analyst Eamonn Hughes said.

The airline is cutting winter capacity at Dublin Airport and some of its UK bases, blaming the tourist taxes introduced in both Ireland and the UK, along with high airport charges, for the move. Dublin will see capacity reduced by 15 per cent, while UK airports will fall 16 per cent, and Stansted capacity will fall by 17 per cent.

Additional reporting: Reuters