Ryanair on course to make €295m profit
Ryanair remains on course to make profits of €295 million this year, chief executive Michael O’Leary said yesterday.
With Aer Lingus forecasting its profits will fall by up to 50% in 2005 and several more carriers plunging into bankruptcy, the budget carrier maintained its profits will rise in 2005 and 2006.
“We see no reason to change our guidance, nor would we raise our guidance,” Mr O’Leary said at the World Low-Cost Airlines summit in Amsterdam.
“We had a fair idea of what fuel would be at the end of [quarter one] and we are almost fully hedged to the end of March [2006],” he added.
He said the airline expects its average fares to increase by up to 2% in the current quarter, which ends this month.
Mr O’Leary said market conditions remained challenging and it was difficult to predict what would happen this winter.
“The winter is always a hard time to predict.
“We have a good degree of visibility into the periods October and November, but almost none for January, February and March,” he said. Mr O’Leary added the impact of high oil prices on European economies this winter may speed up Ryanair’s growth but also reduce fares.
“We suspect it should speed up our growth because more and more people will be price-sensitive on air travel, but it will not be good for yields.
“It is too early to say yet,” he said.
The airline also announced further routes yesterday, this time from Nantes in France.
Already this week the carrier has announced expansion of destinations from Knock, Shannon, Cork and Nottingham - the last of which became its fifteenth European base.
The airline has taken advantage of the problems of its rivals, surpassing British Airways in August as the largest carrier in Europe by passenger numbers.
BA was hit by industrial unrest in the month and passengers figures fell by 3%.
The airline is expected to carry nearly 35 million passengers in the 12 months to March 2006, nearly 30% more than it did in the previous year.
In a research note yesterday, Davy Stockbrokers analyst Stephen Furlong said Ryanair’s decision to set up a base in Nottingham was unsurprising, given capacity constraints in London.
