Ryanair profits fall 21% in first fiscal quarter

Ryanair has announced a 21 per cent fall in profits to €78 million for its first fiscal quarter as traffic increased by 3 per cent to 23.2 million.

The company has said the decline was largely expected, due to the timing of Easter, which fell outside the April to June reporting period this year, and the impact of the French air traffic control strikes in June.

Average fares fell 4 per cent, but revenue per passenger rose 1 per cent due to a rise in the purchase of reserved seating and priority boarding, and higher administration and credit card fees.

Unit costs rose 4 per cent, mainly due to a 6 per cent rise in fuel costs to €577 million, or 47 per cent of total operating costs, and a 2 per cent rise in flight crew pay.

The company expects yields for the second quarter to rise despite a slow down in last-minute summer bookings in recent weeks, attributed to the heatwave across Northern Europe.

“Our outlook remains cautious for the full year as market conditions are tough with recession, austerity, high fuel costs, and excessive Government taxes impacting air travel demand and yields,” said Ryanair chief executive Michael O’Leary.

“While we expect full year traffic to grow 3 per cent to 81.5 million, we still have no visibility over next winter’s yields, and on the basis that the recent yield weakness in close-in summer bookings does not continue, we see no reason to change our full year profit after tax guidance which remains at between €570 million to €600 million.”

He said the company’s balance sheet had gross cash of €3.6 billion and net cash of €191 million, despite a recent €177 million share buyback, “remains unmatched in our industry”.

The company plans to announce new routes and bases later this year in an effort to exploit opportunities in markets where competitors such as Air Berlin, Alitalia, Iberia, LOT and SAS are scaling back.