Ryanair shares rose almost 2 per cent yesterday after the airline told the market its full-year profits were likely to rise by 11 per cent to €335 million.
The airline also announced plans to order a further 32 Boeing 737s, bringing the total number of 737s in its fleet to 281. The 32 new aircraft are due for delivery between September 2008 and June 2009. Ryanair said it would carry 42 million passengers this year and, ultimately, 84 million passengers within six years.
Ryanair is converting options it already holds with Boeing. Boeing has been its manufacturer of choice for many years.
The airline said net profit was forecast to rise 11 per cent for the year to the end of next March. This compares to previous guidance that estimated profit growth at between 5 and 10 per cent. Ryanair shares responded positively to the news, which came at an investors' briefing in New York. The airline's shares have been rising strongly recently on the back of softening oil prices.
Chief executive Michael O'Leary said the higher profit guidance was based on better-than-expected passenger growth and expectations of improved yield stability during winter. Yield refers to the average revenue per passenger.
"Our outlook for this winter remains cautious," Mr O'Leary said in a statement. The airline said full-year passenger numbers were set to rise 22 per cent to 42.5 million compared to a previous forecast of 20 per cent. Load factors were expected to be 2 per cent lower in the second half than last year, it said.
A few days ago the airline said it had hedged fuel from January to March 2007 at $73 per barrel. Mr O'Leary said the price the airline had locked in at was lower than anticipated. He said various loss-making airlines would be forced to slash fares to compete with Ryanair.
Mr O'Leary said the Boeing deal would provide the airline with aircraft with all the latest technology, including blended winglets that should reduce fuel burn by 45 per cent. Winglets are small devices used to improve the efficiency of aircraft by lowering the drag associated with conventional wings.
Several airlines have raised their earnings forecasts over recent weeks, mainly on the back of falling jet fuel prices. The fallout from the recent security alert in London has not been as prolonged as some observers initially predicted.
