Airline criticises lack of incentives
It warned that the number of Ryanair flights out of Ireland will continue to drop unless airports lower their charges.
Ireland accounts for just 10% of Ryanair’s originating traffic compared with 30% in Britain, its biggest market. Spain accounts for 22% and Italy 20%.
Ryanair’s finance director, Howard Millar said that traffic at Irish airports will continue to fall unless things change.
He said many airports across Europe are seeing an expansion of Ryanair services due to the discounts being offered to the airline. Mr Millar said Ryanair had put a proposal to the Irish airports explaining how it could increase passenger numbers.
Ryanair said average fares are expected to rise further this quarter to €39, having increased 15% in quarter three by 15% to €34. Mr Millar said fares should rise too in 2011. He said fares however are still below the €45 average in 2007.
In its quarter three results for the last three months of 2010 Ryanair said bad weather and a raft of strikes saw it reporting a loss of €10.3m. The airline was forced to cancel 3,000 flights in the period. However, the loss was down from the €10.9m deficit the airline recorded the year before.
“This small third-quarter loss of €10m is disappointing, as we were on track to break even, but earnings were hit by a series of air traffic control strikes in the third quarter, compounded by a spate of bad weather airport closures in December,” said the airline’s chief executive, Michael O’Leary said.
Ryanair said profit in the fourth quarter will benefit from new routes to be launched in February and March because fewer planes will be grounded compared with the third quarter. It is forecasting a full-year net profit for the year to March 31 at the top end of a forecast of between €380m and €400m.
There was also a 20% increase to €167m in sales of items such as in-flight snacks. Mr Millar said there is no “silver bullet” in the pipeline in terms of new ways of generating revenue.
There was an increase of 6% in passenger numbers during the period with the airline expecting to carry 73.5 million passengers in the full year.
The airline also saw its fuel bill for the quarter rise by 37%. However it said it had been protected from significant rises in oil prices in recent months by its fuel hedging strategy. The airline is 90% hedged for the fourth quarter at a price of $750 per tonne compared with the current spot price of $890 per tonne.
NCB analyst Murray McCarter said Ryanair’s update was reassuring.
“In particular the strong increase in fares and ancillary revenues is impressive despite the challenging conditions through the winter,” he said.
Yesterday Ryanair shares increased 0.75% to €3.65.
