Tuesday, February 02, 2010
RYANAIR shares soared yesterday after the airline announced better-than-expected third quarter results with losses of almost €11 million.
It also said its Irish customers can expect to pay more for flights this year as they absorb the €10 government travel tax into ticket prices.
Analysts had expected losses of around €35m for the three months to the end of December 2009 compared with losses of €118.8m a year earlier.
The airline raised its full-year profit forecast pushing its shares up almost 6.7% to €3.58 at close yesterday.
Ryanair chief financial officer, Howard Millar said Ryanair is likely to be the only profitable airline this year.
It has however pushed out by a year its profit target of €800m by 2012.
Mr Millar said the airline has never received an offer for its Aer Lingus stake but added that if the price was right the airline would sell the near 30% shareholding. He added that the airline has "no regrets" about taking such a large stake in the airline.
Ryanair also has no plans to invest in other airlines and it is understood that there is no truth is reports it has offered to buy an equity stake in Brazilian airline, WebJet.
Net income is likely to be around €275m in the year ending March 31, compared with earlier forecasts of earnings at the "lower end" of a €200m to €300m range.
Mr Millar refused to give a guidance on yields for the coming financial year but confirmed prices in Ireland would go up as passengers absorb the air travel tax.
Deputy chief executive, Michael Cawley said however that as the airline’s rate of growth moderates, its fares, or fare reductions, will moderate and there may be some fare increases sooner than might otherwise have been expected.
Yields, a measure of average ticket prices, fell by 12% in the third quarter, less than the 20% Ryanair had forecast. The company expects fares to drop by 15% for the full year.
Ryanair chief executive, Michael O’Leary said the airline’s Irish routes are the least profitable because they are the most costly.
"All of our expansion is driven by the cost focus," he said.
Sales including ancillary revenue rose 1.2% to €611.9m. Fuel costs fell 37% from a year earlier to €207m.
Ryanair is reining in its growth strategy following the collapse of talks with Boeing on an order for as many as 200 of the manufacturer’s 737-model planes. The carrier will still add 112 of the Boeing aircraft in the next three years, expanding its fleet by almost 50%.
Mr O’Leary also said there are no plans to expand at Gatwick airport.
"Unless someone like British Airways announced they were giving up Gatwick, I doubt we’d get a lot of slots at Gatwick," he said.
He also confirmed that the airline suffered significant snow disruption in Ireland and Britain last month.
© Examiner Publications (Cork) Limited, City Quarter, Lapps Quay, Cork. Registered in Ireland: 73385.