Ryanair has reported an 8% fall in profits for the first time in five years as lower fares, weaker sterling, and good weather resulted in a full-year profit of €523m.
The markets responded positively to the airline’s guidance that it will have an increased profit this year of up to €620m.
Shares in the airline increased by almost 40c to close at €7 following the full-year results.
The low-cost airline forecasts that it will achieve an increase in profits this year to between €580m and €620m, as strong pricing and an increased focus on customer service get more passengers on board.
Chief marketing officer Kenny Jacobs said that announcing Ryanair’s winter schedule early had resulted in a boost of forward-booking from German and Scandinavian customers.
“We released our winter schedule three months earlier than we would have, and again that is something customers have asked us for particularly across Europe,” said Mr Jacobs.
“The Germans have asked us and the Scandinavians like to book their holidays all the way to the year end, so releasing that earlier has actually helped the forward booking considerably and that is helping the performance.”
The airline said that it managed to increase the number of passengers it carried to nearly 82m. Despite the increase in passengers, a fall in fares meant that Ryanair had to rely on ancillary revenue in order to maintain its key revenue per passenger figure.
Even though the company’s profits were down, they nonetheless outperformed their targets following the release of two profit warnings earlier in the year.
Mr Jacobs said that the bumper summer had affected all carriers’ profitability as people generally had not taken traditional winter sun breaks.
“If you go back to the second half of last year in Q3, it was soft across the market,” said Mr Jacobs.
“There were a couple of factors behind that. After the bumper summer we had across Europe, a lot of people decided to stay at home after the summer and so they didn’t need a winter getaway as much as in previous years.
“There was also a rise in fuel costs, sterling was a bit weaker and that brought average fares down. That was a weakness that we saw it was across the market and most of our competitors saw it too.”
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