Ryanair 737-800. By Rob Finlayson
Ryanair (FR) reported a net profit of €14.9 million ($19.7 million) in the third quarter ended Dec. 31, 2011, a complete turnaround from a €10.3 million deficit in the year-ago period.
The improvement was a result of an increase in yield after the LCC cut capacity by 2% as well as strong ancillary revenues.
Europe’s largest LCC grounded 80 aircraft for the winter season to offset the damaging combination of weak demand with rising fuel prices (ATW Daily News, Nov. 8, 2011).
FR CEO Michael O’Leary said the third-quarter profit “was slightly ahead of guidance due to a combination of benign weather, which caused fewer flight cancellations and significant de-icing savings, and a better performance on yields reflecting our planned winter capacity cuts, longer sectors, and higher competitor fares/fuel surcharges.”
He added that if the positive third-quarter tends continue into the fourth quarter, ending March 31, “we now expect our full-year profit will exceed previous guidance [of €440 million] and rise to €480 million.”
Total operating revenue rose 13% to €844.4 million, on a 2% decrease in passenger carried to 16.7 million and a 17% hike in average fares (including baggage fees). Ancillary revenue increased 6% to €177 million despite the decrease in passenger volume, and rose by 8% on a per passenger basis because of an improved product mix and higher Internet-related revenues, the carrier said.
Fiscal third-quarter operating expenses increased 9% to €815 million, primarily because of 18% increase in fuel costs and a 7% increase in sector length. Fuel now represents 41% of the carrier’s total operating costs. Unit costs, ex-fuel, increased by 6%. Load factor decreased by two points to 81%. Operating profit was €29.4 million compared to an operating loss of €0.3 million in the year-ago period.
O’Leary said the airline’s new routes and bases “have performed well this winter” and it remains on course to open a further five new bases in Baden Baden, Billund, Palma, Paphos and Wroclaw in March/April. He said FR expects to launch at least one more base for the summer of 2012.