Ryanair re­ports record an­nual profit

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Ryanair re­ported record an­nual profit yes­ter­day de­spite sharp falls in av­er­age fares ow­ing to over­ca­pac­ity and Bri­tain’s vote to leave the Euro­pean Union, and promised higher prof­its and lower fares next year.

Europe’s largest car­rier by pas­sen­ger num­bers, Ryanair said it earned a net profit of €1.31 bil­lion (Dh5.36bn), at the lower end of its fore­cast range of €1.3bn to €1.35bn, but in line with an­a­lyst fore­casts.

In Oc­to­ber, Ryanair had cut its ini­tial profit fore­cast of be­tween €1.37bn and €1.42bn by 5 per cent be­cause of ster­ling weak­ness fol­low­ing Bri­tain’s Brexit vote.

Af­ter years of fall­ing ticket prices, Euro­pean car­ri­ers in re­cent weeks have re­ported signs of a turn­around as the de­cline in fares slows.

Ryanair said it ex­pected its fares to fall by be­tween 5 and 7 per cent in the year to the end of March 2018, down from a fall of 13 per cent in the year to endMarch 2017.

Ryanair, which flies 1,800 daily flights across 33 coun­tries, has used the low-fare en­vi­ron­ment to press home its cost ad­van­tage and in­crease ca­pac­ity. It flew 120 mil­lion pas­sen­gers in the year to the end of March, up from an ini­tial es­ti­mate of 116 mil­lion. Its tar­get of 130 mil­lion pas­sen­gers in the year to March 2018 im­plies growth of about 8 per cent, down from 13 per cent this year.

“We are pleased to re­port a 6 per cent in­crease in profit af­ter tax … de­spite dif­fi­cult trad­ing con­di­tions caused by a se­ries of se­cu­rity events at Euro­pean cities, a switch of char­ter ca­pac­ity from North Africa, Turkey and Egypt to main­land Europe, and a sharp de­cline in ster­ling fol­low­ing the June 2016 Brexit vote,” chief ex­ec­u­tive Michael O’Leary said in a state­ment.

“Investors should be wary of the risk of neg­a­tive Brexit devel­op­ments, or any re­peat of last year’s se­cu­rity events at Euro­pean cities, which could dam­age con­sumer con­fi­dence, close-in book­ings and this FY18 guid­ance,” he said.

Ryanair also said it plans to ac­cel­er­ate its Euro­pean ex­pan­sion to take ad­van­tage of fi­nan­cial woes at re­gional com­peti­tors and re­duce its re­liance on the un­cer­tain UK mar­ket.

Ryanair said it is in talks with Boe­ing to add two or three more 737 jets to its ex­ist­ing de­liv­ery sched­ule while ex­tend­ing leases on 10 other planes through 2019. The moves will help to fuel growth in Italy, Ger­many, Poland and Ro­ma­nia, where air­lines are re­struc­tur­ing op­er­a­tions amid steep losses. “There’s a huge amount of op­por­tu­ni­ties out there across Europe as we grow and one of the lim­it­ing fac­tors con­tin­ues to be de­liv­er­ies of the air­craft,” said chief fi­nan­cial of­fi­cer Neil So­ra­han.

“We’ve said to Boe­ing, if they see gaps in their sched­ule and have ad­di­tional air­craft, we’ll take them.”

Ryanair an­nounced its lat­est re­sults be­fore the mar­kets opened yes­ter­day. Its shares were down 1.5 per cent at 8:16am in Dublin, par­ing its gain for the year to 21 per cent.

Ja­son Alden / Bloomberg

Michael O’Leary, chief ex­ec­u­tive of Ryanair.

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