Shares in Ryanair slipped by around 3 per cent yesterday as the airline reported a drop in the percentage of seats filled on its planes for the third month in a row.
Ryanair said it only managed to fill 85 per cent of seats in July, down from 93 per cent in the same month last year.
"I can't say I'm excited by the numbers," said Mr Chris Avery, analyst at JP Morgan in London, noting that Ryanair's load factor, which measures the percentage of seats that are filled on its planes, had fallen by six points in May followed by a nine-point drop in June.
"We had been hoping that the load factor reduction would have got smaller faster. It looks like it is going to take some time for traffic to catch up with capacity," Mr Avery said.
The airline also reported that it had carried more than two million passengers in July, up from 1.46 million a year ago. It said the 2.04 million travellers who used Ryanair last month marked a new record for the company and for a low-fares airline outside the US.
"The latest passenger statistics. . . show a traffic increase of 40 per cent compared to July 2002. This strong growth confirms that Ryanair is on track to carry 24 million passengers in a full year," Ryanair spokesman Mr Paul Fitzsimmons said.
But disappointment with the load factor figures overshadowed the passenger growth statistics in the market and caused the share price to fall. In Dublin, the shares closed 3 per cent lower at €5.93 in holiday-thinned trade, while in London they also shed 3 per cent.
The market is now awaiting the release of first-quarter figures by the airline today with most analysts forecasting a rise of around 10 per cent in net income and earnings per share.
Investors will be particularly interested in what Ryanair and its chief executive, Mr Michael O'Leary, have to say about the outlook for the coming months, and particularly whether there are any signs of a moderation in yield decline.
"The chief issue with investors is concern over the current aggressive pricing environment, how long this is likely to persist, whether it might further impact Ryanair's profitability and whether it is a sign that the company's model has reached maturity," Mr John Mattimoe, analyst at Merrion Stockbrokers, said in a recent note on the company.
There is also concern among investors about the regulatory issues facing the company, particularly the European Commission's inquiry into its agreement with Charleroi Airport in Belgium, which has been under way since December. More recently, the airline fell foul of state-aid rules when a French court ruled as illegal financial aid granted to Ryanair to help establish a service between Strasbourg and London.
Meanwhile, the passenger figures released by Ryanair yesterday showed that seat sales via the Ryanair internet site represented 94 per cent of the total in July, up from 92 per cent a year ago.
