Ryanair reports record annual profit
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.
Michael O’Leary, chief executive of Ryanair.