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Ryanair lifts profit forecast
Ryanair has raised its profit forecast for its current financial year which ends in March. The Irish low-cost airline, which is Europe’s largest, said higher ticket prices are more than making up for expensive fuel and reduced numbers of flights. Its net profit in the quarter to the end of December was 15 million euros compared with the same period a year earlier as average fares rose 17 percent. The higher fares made up for a two percent fall in passenger numbers as the airline grounded 80 of its 270 planes over the winter due to high fuel costs. Ryanair followed British peer EasyJet in posting strong revenue growth as higher-priced rivals are battered by fuel costs and a struggling global economy. German group Lufthansa and Air France-KLM have cut profit forecasts after being hit by fuel cost rises and slashed plans to expand in 2012. “The EU recession, higher oil prices, the unfolding failure of the package tour operator model, significant competitor fare increases and capacity cuts, has created enormous growth opportunities for Ryanair,” Chief Executive Michael O’Leary said in a statement. Ryanair is examining opportunities in Spain following the collapse last week of loss-making rival Spanair, Chief Financial Officer Howard Millar said. One cloud on the horizon is the fuel bill, which Ryanair is forecasting will increase by 350 million euros in its next financial year, which runs from April 2012 to March 2013. That poses a significant cost challenge, but does not necessarily mean profit growth will slow, Millar said. “So far we have been able to pass on higher fuel charges to passengers in the form of higher fares. So far so good, but one never knows,” he said. More about: Airlines, Ireland, Profits, Ryanair