Ryanair predicts profits boost thanks to strong pound and wet summer

Ryanair became the latest airline to thank the wet summer weather and strong pound for helping profits take off as it upped its outlook for the full year.

The Irish no frills airline said holidaymakers booking last minute deals to escape the dismal end to the summer helped its passenger numbers jump 13% in the first half of its financial year and is expecting a 15% hike in the third quarter.

It is now pencilling in annual profits of between €1.18bn to €1.23bn for the year to the end of March - a sharp rise on the €867m it posted the year before and a 25% increase on its previous forecast.

The recent poor weather spurred many to jet off to beach destinations, while Britons have also been travelling abroad to take advantage of the strong pound.

Last week, fellow budget carrier easyJet also increased its profit guidance after notching up record passenger numbers in July and August.

Airlines have been helped further by cheaper fuel costs as the price of oil has tumbled in recent months.

Ryanair chief executive Michael O’Leary said: “We have been surprised by the strength of close-in (late) bookings and fares this summer.”

“We have clearly benefited from favourable industry trends this summer including bad weather in Northern Europe, stronger sterling encouraging more UK families to holiday in the Med, reasonably flat capacity across the EU industry and lower prices for our unhedged oil,” he added.

But he cautioned shareholders against “irrational exuberance” after the profits guidance hike, stressing the recent boost enjoyed by the airline industry is not expected to continue.