Cantillon: Ryanair Q3 brings in €4.14 per passenger

Ryanair almost doubled the profits that it earned from each passenger that it carried in the three months ended December 31st – its third quarter, according to the figures released yesterday.

Over that three months, the airline flew 24.9 million people and earned profits after tax of €103 million, that is €4.14 from each individual.

Over the same period in 2014, it flew 20.8 million people and earned €49 million after tax, that is €2.36 from each individual.

The airline’s unit costs were 5 per cent lower, meaning that it the actual cost of flying each passenger was down. This pushed up its net margin, which also doubled, to 8 per cent from 4 per cent.

And, of course, it carried four million more people over the three months than during the same period in 2014.

What happened is that the extra passengers combined with the lower cost of carrying them to deliver more to the airline’s bottom line.

The lower cost also helped in another sense, in that it gave the airline more scope to cut prices to entice more people to travel with it – something it did as the average fare fell 1 per cent to €40.

A big factor in those lower costs and fares is low oil prices, unit costs were down 5 per cent overall, but stripping out the impact of cheaper fuel, they were 1 per cent less.

Passengers basically pocketed this, as it matched the reduction in average fares.

In effect, the company returned the “real” 1 per cent saving in those costs it can control to its customers.

Had it done this saving without the benefit of the fuel savings it would still have shown an increase in profit to about €59 million, reflecting the growth in passengers.

At this point, it looks like the airline company has little to fear once the oil prices, as they inevitably will, begin rising again.