Ryanair raises full-year forecasts after 'bumper summer'

Ryanair raises full-year forecasts after 'bumper summer'

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Ryanair today further raised its full-year traffic target to 105 million passenger and profits forecast to as much as €1.25 billion on the back of a “bumper” summer.

The low-cost airline giant reported half-year net profits up by 37% to more than €1 billion from €795 million in the same period last year.

Passenger numbers rose by 13% to 58 million in the six months to September 30 with a load factor up by four percentage points to 93% while costs dropped by 6%.

The performance was achieved despite the impact of French air traffic control strikes, the closure of Terminal 3 at Rome Fiumicino airport due to a fire in May.

Average fares were down by 2% year-on-year to €56 and the airline’s on-time performance improved 2% points to 91%.

Expansion will continue over the winter with the delivery of 28 Boeing 737s which will take the fleet to 340, with another 330 on order. Fur new bases are to open over the winter with 119 new routes.

The new aircraft will feature new interiors and ‘slimline’ seats which the airline says will improve leg room.

Chief executive, Michael O’Leary, said: “We are pleased to report this strong set of first half 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’ customer experience programme.

“The continuing success of our AGB programme is driving stronger forward bookings, higher load factors, and accelerating our traffic growth.

“Having raised our full year traffic target from 103 million to 104 million in September we are raising it again today to 105 million, which is 16% higher than last year’s 90.6 million.”

He added that the carrier’s revamped website “will enable Ryanair to better understand our customers and better meet their travel needs with appropriate offers for hotels, car hire, restaurants venues and other services”.

A new car hire partnership with CarTrawler has “significantly improved” car hire availability and service, according to O’Leary.

Looking forward, he said the airline continued to see significant growth opportunities.

“We are have raised our full year traffic target from 104 million to 105 million customers due to higher load factors in the second half with third quarter traffic set to grow 17% and fourth quarter by 22%. 

“As forward pricing has softened in recent weeks we expect third quarter average fares will be broadly flat against last year, but fourth quarter fares will fall by approximately 4%. 

“We expect unit costs to fall by 5% in the full year, while ex-fuel unit costs will be down 1%.

“Ancillary revenue, while ahead of our long term target of 20% of total revenue, will track behind this year’s 16% increase in traffic due to a one-time benefit last year arising from the earlier loading of the summer 2015 schedule and the absence of a car-hire partner in July and August.

“Accordingly, we now guide that full year net profit will be towards the upper end of our €1,175 million to €1,225 million range.

“However, we caution that this guidance is heavily dependent on the strength of close-in bookings in the fourth quarter where we have almost zero visibility yet are planning to deliver 22% traffic growth.

“Looking beyond the current year, based on these stronger than expected load factors, we have raised our long term traffic target from 160 million to 180 million customers by full year 2024.”

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