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Ryanair’s 1Q15 profit grows 25% year-on-year

tRyanair’s 30th anniversary has reaped strong financial results for the first quarter of 2015 (1Q15), with increased passenger numbers – up 16% to 28 million in comparison with 24.3 million for the same period last year – meaning the airline has recorded an average load factor of 92%, a growth of 6 percentage points compared with 1Q14.Overall, the airline has reported a 1Q15 profit after tax of €245 million, up 25% from €197 million last year. Furthermore, despite 1Q15 capital expenditure of €324 million and share buybacks of €195 million, the airline’s net cash increased to over €550 million (from €364 million in March). Ryanair has now completed almost 90% of its current €400 million share buyback programme which, when it closes in August, will have returned almost €3 billion to shareholders via special dividends and share buybacks since 2008.“We are pleased to report strong growth in traffic and profits in Q1,” stated Ryanair’s CEO Michael O’Leary. “Our mix of low fares, best on time performance (91% in Q1) and enhanced customer experience under our ‘Always Getting Better’ programme, continues to attract millions of new customers. At the same time our focus on cost (Q1 unit costs fell 7%) enables us to pass on lower fares to customers. Q1 average fares fell 4% to just €45, due to the timing of Easter, weaker April yields and lower checked bag penetration as more families and business customers enjoy discounts on their luggage or benefit from our free 2nd carry-on bag policy.”Other improvements to the ‘Always Getting Better’ programme include the cutting of fees for sports equipment in April, an upgrade to the Ryanair mobile app to facilitate faster and easier booking in May and the announcement of Sabre as the airline’s 3rd GDS partner in June. Moreover, the carrier has enhanced its Groups travel service by adding dedicated Groups page on is website as well as joining Facebook, which provides another channel through which it can communicate with passengers.Ryanair says under the ‘Always Getting Better’ programme passengers will see a new personalised website, new aircraft interiors, new crew uniforms and new bases later this year. In accordance with these developments, the airline says its ancillary revenue will be well ahead of its long-term target of 20% of total revenue, but will track behind the 14% growth in customer numbers in FY16.On the back of its positive 1Q15 financial results, Ryanair is increasing its FY16 traffic target from 100 million to 103 million, which the carrier hopes to achieve through a combination of strong load factor and fewer winter groundings.This winter the airline will take delivery of 31 aircraft, increasing its fleet to 340 Boeing 737-800s by year-end. In September, it will open a 6th German base in Berlin. September will also see the carrier open its second Swedish base in Gothenburg. In November, Israel will become the 31st country served by Ryanair when it begins flights to Eilat Ovda Airport from Budapest, Kaunas and Krakow.However, the airline has closed two Danish bases in Copenhagen and Billund following threats by the Danish Unions – who admitted that they had no members among Ryanair’s Copenhagen pilots or cabin crew – to get their members (competitor airline employees) to blockade/disrupt its flights. By moving the aircraft from Copenhagen and Billund to airports outside Denmark, the unions have no legal basis for imposing these threatened disruptions, which allows Ryanair to continue to grow strongly in Copenhagen without union interference.Ryanair predicts that average fares for 1H15 will remain broadly flat, in line with its previous guidance of 0% to -2%, but notes that since its policy is to be load factor active/yield passive, it expects 2H15 fares will be towards the higher end of its -4% to –8% guidance range.“We think it is too early in the year to alter our full year profit guidance, although the slightly better H1 yields will push it towards the upper end of our previously guided range of €940 million to €970 million net profit. We caution however that this guidance, which is 12% ahead of last year’s profit, is heavily reliant on the final outturn of H2 fares over which we currently have almost zero visibility,” O’Leary explained. “Ryanair will continue to pursue its strategy of being load factor active and yield passive for the benefit of our customers, our people and our shareholders.”

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