Image overhaul helps Ryanair profits take off

A bumper opening quarter saw Ryanair profits surge 25% to €245m as the airline’s new softer image helped attract customers in ever-increasing numbers.

The strong profit figure was achieved on the back of a 16% increase in the number of passengers the airline carried in the three-month period to 28m and 10% revenue growth.

The airline’s revenue climbed from €1.44bn to €1.65bn with cost savings also contributing to improving margins.

Much of the company’s impressive set of results can be attributed to its ‘Always Getting Better’ programme which has softened its image, Ryanair chief marketing officer Kenny Jacobs said. “The key things that make it happen are the ongoing success of ‘Always Getting Better’, the [improved] load factor and the traffic numbers — we’re very, very happy with a 16% increase in traffic… The load factor 6% increase is the same as 12 additional customers on every single Ryanair flight which is phenomenal.

“In summary, it’s great for customers, great for shareholders and great for everyone here at Ryanair so hopefully it continues but we’re cautious,” Mr Jacobs said.

That caution is borne out of what Mr Jacobs sees as a potential price war coming down the tracks in the coming months which could see further fare reductions on the back of a 4% fall in the average fare to €45 in the opening quarter of the financial year. Ryanair now expects full-year profit to be towards the upper end of the previously guided €940m-€970m range but has decided against revising upwards to any greater extent despite yesterday’s strong set of results.

Analysts welcomed the results which they said were largely in line with forecasts, although some hinted at a full-year net profit figure as large as €1bn.

“Ryanair has delivered another solid quarter with net profits up 25% to €245.1m, broadly in line with consensus and €249m and Davy’s €250.6m… [Ryanair’s] balance sheet remains industry leading with a net cash position of €550m and with the potential for €250m of fuel savings into the full-year 2017, its market position looks enviable,” said Davy Stockbrokers analyst, Stephen Furlong.

Ryanair’s share price was down 2.5% yesterday at €12.01. The airline has fuel hedging savings of €85m in 2016 to look forward to, rising to €250m the following year.

The airline also flagged further plans for its ‘Always Getting Better’ programme with an upgraded website; altered aircraft interiors and new uniforms among the development to be rolled out before the end of the year.

Mr Jacobs also heralded the impact of its new Business Plus account which allows fast-track airport security and flexibility to change bookings which he said, had helped it gain a greater share of the market.

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