Posted on: 02 February 2015 by Mark Howells
Ryanair has announced a Q3 net profit of €49 million – an improvement on last year’s loss of €35 million during the same period – which CEO Michael O’Leary says is down to the airline’s “Always Getting Better” customer service programme and expanded business schedules, coupled with substantial fare and cost advantage over competitors.”
Q3 also saw Ryanair’s traffic grow 14% to 21 million passengers, with the average fare rising 2% to €40. Revenues grew 17% to €1,132 million while unit costs fell 6% (excluding fuel they remained flat). The load factor rose 6 percentage points from 82% in the Q3 last year to 88% in the latest quarter.
Key milestones which helped to secure these strong results include the launch of Ryanair’s US website under the Always Getting Better programme, the release of the airline’s summer schedule two months earlier than usual and the presence of more primary airports and city pairs in the newly expanded winter schedule. Ryanair also took delivery of five of its 380 Boeing 737-800 orders during this period.
As a result, the airline has decided to raise its full year net profit guidance from €810m-€830m to a range of €840m-€850m. However, this figure also takes into account a softening in prices for forward bookings during the first weeks of January. Furthermore, Ryanair acknowledges that whilst Q4 traffic is expected to grow by around 25%, average fares will fall by 6% to 8% due to lower fares helping to expand the airline’s network.
In other news, with the decrease in unit cost due to lower oil prices, Ryanair has decided to further extend its fuel hedges into FY17. Its capital expenditure programme is fully hedged to September 2017 at a rate of $1.35, which locks in significantly lower cost aircraft deliveries over the next 2 years.Next steps for the airline include a €400 million share buy-back programme which will commence on 12 February. The programme will, subject to market conditions, be executed over a 6 month period between February and August 2015. Ryanair will also launch a mobile app in April this year and run a series of events and special promotional fares to celebrate its 30th birthday.