Airline ups forecast again after 21% profit rise

Ryanair has increased its full-year profit guidance for the second time in nearly as many months, on the back of a strong set of third-quarter figures.

The airline yesterday reported after-tax profits of €18.1m for the three months to the end of December, representing a better-than-expected 21% year-on-year rise.

Like-for-like basic earnings per share were up 23% to 1.25c while revenue for the period was up 15% on an annualised basis to €969m.

Pre-tax profit was up by 24.5% on the same quarter last year — from €15.5m to €19.3m while ancillary revenue continued to perform strongly, rising by 24%, year-on-year, to €220.1m.

Passenger numbers for the three months grew by 3%, from 16.7m to 17.3m, and Ryanair now anticipates that its full-year after-tax profits (for the 12 months to the end of March) will amount to approximately €540m. That would be up by 7% on the previous year, despite the airline seeing its fuel costs increase by 19%.

At the time of the publication of its first-half financial results in early November, Ryanair initially upped its full-year profit guidance from a range of €400m-€440m to one of €490m-€520m.

While Ryanair’s full-year 2013 passenger figures are likely to be hit by a drop of around 400,000 users in the fourth quarter, due to the grounding of 80 aircraft and a seasonal weakening in demand, management is confident of numbers hitting 82.5m by Mar 2014.

The impressive performance in the third quarter was largely driven by strong pre-Christmas bookings at higher yields.

Ryanair’s average fares rose by 8%, year-on-year, during the quarter.

Deputy chief executive Michael Cawley said the airline should see a further rise in profits next year, with fares also set to increase.

Mr Cawley claimed that the only modest growth that will be seen in the European airline industry over the next 12 months will be among lower-cost carriers like Ryanair, which has now hedged on 75% of its fuel costs up to 2014.