2nd February 2015
Discount carrier Ryanair has upped its expectations for its full-year results after reporting a net profit of €49m for the three months ended 31 December 2014 today.
Over the period traffic grew 14% to 21m customers as average fares rose 2% to €40. Revenues grew 17% to more than €1.13bn while unit costs fell 6%.
The airline, which posted a loss of €35m during the same period in 2013, said that it anticipated that traffic would rise by 25% in the three months to the end of March, while average fares will fall by 6% to 8% as its uses lower costs to expand its network. It added that falling oil prices would cut costs by 5%.
As a result it has raised its full-year net profit guidance from between €810m and €830m to around €840m to €850m.
Ryanair’s CEO, Michael O’Leary, said: “As 2015 will be Ryanair’s 30th year of bringing low fares to Europe, we are pleased to report a third quarter profit of €49m. These strong results confirm that our ‘Always Getting Better’ customer programme and our expanded business schedules, coupled with our substantial fare and cost advantage over competitor airlines is drawing millions of new customers to Ryanair.”
Looking further ahead however the airline was slightly less bullish and it recommended shareholders temper expectations for 2016’s full year profits, as its believes that “any growth in profits will be modest” as its fuel is hedged at $92 per barrel, whereas “some competitors will be significant beneficiaries of lower oil prices” and this may lead to downward pressure on airfares in 2015/16.
The group will also start a €400m share buy-back programme on 12 February and it will continue until August. Following the market update shares in the group fell 4%, or €0.43p to €9.97 by 9:48am on Monday.