Ryanair Q3 profit up 21%
Dublin-based carrier confirms Aer Lingus takeover plan
DUBLIN: Ryanair said that net profit rose 21% in the group’s third quarter, as the Irish no-frills airline confirmed a proposal it hoped would enable it to finally win a battle to buy rival Aer Lingus.
Ryanair said in a statement that profit after tax increased by a fifth to 18.1 million euros (US$24mil) in the three months to Dec 31 compared with the equivalent period in 2011, causing the group to hike its fullyear forecast.
It added in a separate statement that Ryanair had submitted “a radical and unprecedented remedies package to the EU in support of its offer for Aer Lingus,” confirming media reports last week.
The Dublin-based carrier, meanwhile, said that its third-quarter profits rose on higher ticket income, helping to offset an 81 million-euro increase in fuel costs.
“Our third-quarter profit of 18 million euros was ahead of expectations due to strong pre-Christmas bookings at higher yields,” Ryanair chief executive Michael O’Leary said in the earnings statement.
The airline warned that its fourthquarter traffic would drop by about 400,000 passengers, or 3% below the level during the equivalent period one year earlier owing to Ryanair grounding up to 80 aircraft to cushion high oil prices, and airport fees as well as seasonally weaker demand.
Nevertheless, Ryanair said it expected the group’s full-year profits to reach close to 540 million euros, exceeding its previous guidance of between 490 million euros and 520 million euros and a 7% rise on 2011-12.
Elsewhere, O’Leary said he believed Ryanair had now addressed all competition issues raised by the European Commission regarding the carrier’s hostile takeover bid for Aer Lingus.
“The remedies involve two up front buyers each basing aircraft in Ireland to take over and operate a substantial part of Aer Lingus’ existing route network and short-haul business,” O’Leary said.
Reports last week said Ryanair has offered to offload more than a third of Aer Lingus’ short-haul operations to secure the takeover.
The Financial Times had said that Ryanair would dispose of 23 routes where a takeover would create a monopoly – to British no-frills airline Flybe.
The business daily added that Ryanair had proposed to give British Airways the right to purchase about half of Aer Lingus’ slots at London Heathrow airport that are used to fly services to Ireland. Ryanair owns 30% of Aer Lingus and last July offered to buy the Irish government’s stake in the airline, but Dublin has stood firm and last month formally announced that it would not sell.
The Irish government owns 25.1% of Aer Lingus – not enough to singlehandedly block Ryanair’s offer, while the European Commission fears that a takeover would diminish competition for Irish consumers.
The EC previously blocked a Ryanair bid for Aer Lingus in 2006, citing it would harm competition. –