Ryanair FY16 profit reaches €1,242m after 43% rise

Ryanair has announced annual profits for its 2015-16 financial year (FY16, which ended on 31 March 2016) of €1,242 million, a 43% increase on the previous financial year’s result.

Traffic (number of booked seats) grew to 18% to 106 million as predicted, which brought an increase in the average load factor of 5 percentage points to 93%. Chief executive Michael O’Leary regards this figure as meaning that flights are basically full. “Certainly it’s difficult to get a seat on Thursdays, Fridays and Saturdays,” he remarked. “Our passenger numbers made is the first airline to carry over 100 m international customers in a calendar year. We expect to book 116 million passengers this FY, which will be a 10% increase.

“Terrorist events and ATC strikes – France again – dampen demand every time they occur,” O’Leary remarked. “The problem for us is that they happen so late that we’ve almost no ability to recover because the following day’s flights are also more than 90% full, so re-booking is difficult and some passenger bookings are lost.”

Forward bookings, however, are improving with 2% better bookings for the summer season, but at lower prices. “That’s where there’s a significant difference between ourselves and many other airlines including the legacy carriers. Many think pricing will be up this summer, we think it will be weaker and go down,” O’Leary argued.

The average Ryanair fare dropped 1% to €46 (“that includes a checked bag,” noted O’Leary) as unit costs fell 6% (excluding fuel, they were down 2%) in Year 2 of the carrier’s Always Getting Better (AGB) programme.

“FY16 was a year in which we delivered significant traffic and profit growth in all four quarters, despite an average oil price of $90 a barrel as a consequence of hedges put in place in 2014,” O’Leary commented. Future hedging has been fixed at $62 per barrel for 95% of FY17’s requirement and $50 for 44% of FY18’s need.

Returning to AGB, O’Leary noted, “Its success is reflected in our record traffic and load factors. Over the past two years we have seen load factors improve from 83% to 93% as our traffic has grown from 80 million to over 106 million a year. We’ve also enhanced the inflight experience with slim line seats, more leg room and the Boeing Sky Interior on our new aircraft. I wasn’t convinced about the Sky Interior at first, but having done a decent length leg recently, it really does make a difference to the feel of the cabin.

“Year 3 of AGB will be about digital acceleration and innovation, particularly through Ryanair Labs,” he continued. “This year’s initiatives will include a new Leisure Plus service, improved Business Plus, a ‘One-Flick’ payment facility on our mobile app, auto check-in for ‘My Ryanair’ customers and lower checked bag fees.”

Ryanair received 41 new Boeing 737s last year enabling the launch of seven new bases – Belfast, Berlin, Corfu, Gothenburg, Ibiza, Milan (Malpensa) and Santiago – over the last 12 months. This year the airline will take delivery of 52 more new 737, which will grow the fleet to 380 (net of handbacks) by year end. Seven more bases – Bucharest, Hamburg, Nuremberg, Prague, Sofia, Timisoara and Vilnius – have been announced as part of the winter FY17 schedule.

Bernie Baldwin, editor, Low-Fare & Regional Airlines/laranews.net
London, UK

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