Irish airline Ryanair saw its first half profits soar by 37 per cent to €1 billion, on the back of a "bumper summer" and fuel savings, as it forecast that full year profit will be at the upper end of its € 1.175bn to € 1.225bn range.
In the six months to September 30th 2015, revenues at the airline rose by 14 per cent to €4bn. Traffic grew 13 per cent to 58m as load factor jumped 4 percentage points to 93 per cent, while average fares rose 2 per cent as unit costs fell by 6 per cent. When fuel is excepted, costs were flat.
Michael O’Leary, chief executive Ryanair, said he was “pleased” with H1 results.
"We have enjoyed a bumper summer due to a very rare confluence of favourable events including stronger sterling, adverse weather in northern Europe, reasonably flat industry capacity and further savings on our unhedged fuel, as millions of customers switched to Ryanair for our Always Getting Better ("AGB") customer experience programme."
Ryanair will open four new bases this winter - Berlin, Corfu, Gothenburg & Milan - and is set to launch 119 new routes including a four daily Dublin – Amsterdam route. Mr O'Leary said that the airline is targeting double digit growth in Ireland, UK, Spain, Italy, Portugal, Poland, Germany, and in Denmark.
The airline said that it took advantage of occasional oil price weakness this summer to further extend its fuel hedges to 95 per cent cover for FY17 at an average rate of $62 a barrel, a move which should deliver deliver fuel savings of some € 430m in FY17. The airline has also hedged against the US dollar, at an average euro/dollar rate of 1.31, and it noted that this means that it will add its new Boeing 737-800NG aircraft at lower euro prices than most of its existing fleet.
Looking ahead, Mr O’Leary said that there are “significant growth opportunities” and it has raised its full year 2016 traffic target from 104m to 105m customers, due to higher load factors in H2 with Q3 traffic set to grow 17 per cent and Q4 by 22 per cent.
Ryanair said that Q3 average fares will be “broadly flat”, but prices will fall by about 4 per cent in Q4, with unit costs also down by about 5 per cent in FY16.
“Accordingly, we now guide that full year net profit (pre-exceptions) will be towards the upper end of our € 1,175m to € 1,225m range,” Mr O’Leary said, but cautioned that this is “heavily dependent” on the strength of close-in bookings in Q4 where the airline has “almost zero visibility”.
By2024, the airline is targeting 180m customers a year.
Ryanair will return the €398m proceeds from the sale of its Aer Lingus stake to shareholders in November.
