DUBLIN: Ryanair’s pretax profits rose 110 per cent in the third quarter from €49 million to €103 million while passenger traffic jumped 20 per cent to 25 million.
The company said revenues increased 17 per cent from €1.13 billion to €1.33 billion in the three months to the end of December.
Ryanair attributed the jump in profits and passenger numbers to a 1 per cent decline in average fares to €40 million and improved customer service.
The airline raised its full-year traffic forecast again to 106 million from a previously guided 105 million and is up 17 per cent on the 90.6 million customers recorded 12 months earlier. Ryanair said fourth quarter traffic is expected to be up by 26 per cent.
The company also announced an €800 million share buyback programme, which is to commence later this week. It said by the time the buy-back is completed, it will have returned in excess of €4 billion to shareholders since 2008.
“We are pleased to report that our low fares policy delivered strong third quarter traffic and profit growth. It is clear that millions of new customers are switching to Ryanair for our “load factor active/yield passive” pricing, our expanding route network and the success of our Always Getting Better customer experience programme,” said chief executive Michael O’Leary.
“Following a strong first half of the third quarter, we noted weaker pricing and bookings immediately after the terrorist events in Paris and Brussels. We reacted to this softness by running price promotions and discounted fares to stimulate double digit traffic growth. While average fares fell 1 per cent, this was offset by lower unit costs,” he added.
Ryanair said unit costs fell by 5 per cent during the three months to the end of December. Fuel, which represents some 40 per cent of the airline’s cost base, was down 10 per cent per customer.
The airline said again it expected full-year net profits to be towards the upper end of the €1.175 billion and €1.225 billion range. However, it stressed the guidance is dependent on the absence of unforeseen events impacting close-in bookings and yields, especially over Easter.
Davy, in a note to investors said Ryanair continues to demonstrate an industry-leading cost position with cash generation continuing to be “spectactular.”
“Despite the announcement of the share buyback programme of €800 million for a nine-month period and likely aircraft funding in cash, we expect Ryanair to continue to have a significant net cash balance sheet. We are likely to broadly maintain our forecasts at current levels and retain our €16.50 price target,” it said.
