Ryanair increases Q1 profit to €197m

Ryanair has reported a net profit of €197 million for its first quarter (1Q15) which ended on 30 June 2014, an increase of 152% over the same period last year, although the company has cautioned that this result was distorted by the timing of a very strong Easter in Q1 with no comparable holiday period in 2013.

Traffic grew to 24.3 million as load factors rose by 4% points to 86%. The average fare rose by 9%, boosted by a strong Easter period, while total revenues were up 11% to €1.496 billion from €1.342 billion in 1Q14. Unit costs fell by 2%, although excluding fuel they rose by 1%.

Ryanair’s chief executive Michael O’Leary commented, “Q1 profits were boosted by a strong Easter (but are somewhat distorted by the absence of Easter on the prior year Q1). The earlier launch of our summer schedule and actively raising our forward bookings has delivered a 4% increase in load factor to 86% and enabled us to better manage close-in yields. Ancillary revenues rose 4% in line with traffic growth, as airport and baggage fee reductions were offset by the rising uptake of allocated seating.

“Our four new bases at Athens, Brussels, Lisbon and Rome are performing strongly. Our strategy to raise forward bookings continues to drive higher load factors and we expect to release our summer 2015 schedule in mid-September, some 3 months earlier than last year,” O’Leary noted.

“This winter we will open four new bases in Cologne, Gdansk, Warsaw and Glasgow International as well as substantially increasing new routes and frequencies at Stansted and Dublin as we invest heavily in our network to build schedules on key city pairs to make them more attractive for business customers.

“We are 90% hedged for FY15 at approximately $96 a barrel, which will deliver savings of €50 million this year at current market rates. This is lower than the €70 million previously guided due to increased volumes in H2. We have also hedged 55% of our H1 FY16 fuel needs at approximately $95 per barrel and weaker US dollar which will deliver a 2% fall in our unit fuel cost at current market rates.

“Based on these 1Q15 results and our strong forward bookings it is clear that we are on track to deliver a strong H1, during which traffic will grow by 3%, and fares will rise by 6% subject to late booking fares in August and September. However we would strongly caution both analysts and investors against any irrational exuberance in what continues to be a difficult economic environment, with some company-specific challenges in H2,” O’Leary concluded.

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