3rd Feb 2020 10:27
(Alliance News) - Ryanair Holdings PLC on Monday reported a profit in the third quarter, compared to a loss the year before, on better-than-expected Christmas and New Year bookings.
In the three months to December 31 - traditionally a weak season for airlines - the budget airline recorded operating profit of EUR91.3 million, compared to a loss of EUR68.0 million for the same period a year before.
Total operating revenue in the third quarter was up 21% year on year to EUR1.91 billion from EUR1.58 billion. Traffic rose 6.2% to 35.9 million, while revenue per passenger grew 13%.
Load factor was up to 96% from 95%.
"Better than expected Christmas and New Year bookings, at higher fares, led to a 16% increase in scheduled revenue as we carried 36 million guests at 9% higher fares. Ancillary revenue increased by 28% to EUR720 million as more guests choose Priority Boarding and Preferred Seat services," the airline said.
Total operating expenses grew 9.7% to EUR1.81 billion from EUR1.65 billion.
Ryanair said: "Our fuel bill rose 14% to EUR700 million due to higher prices and 6% traffic growth. Ex-fuel unit costs rose by 1% due to higher staff (increased pilot pay, higher crew ratios as pilot resignations have slowed to almost zero) and maintenance costs (older aircraft longer in the fleet due to the Boeing MAX delivery delays), offset by falling EU261 costs due to improved punctuality."
The company's fuel is 90% hedged for financial 2020 at USD71 per barrel and 90% of its financial 2021 fuel is hedged at USD61 per barrel, which, Ryanair said, should save the airline about USD100 million.
"We continue to negotiate attractive growth deals as airports compete to win Ryanair's very limited traffic growth," the company added.
Turning to the ongoing Boeing 737 MAX aircraft delivery delays, Ryanair said it is now likely the first delivery will be September or October 2020.
The requirement for MAX simulator training also will slow down the delivery of backlogged aircraft and new deliveries, Ryanair added.
The airline continued: "But we believe that these 'gamechanger' aircraft (with 4% more seats, burn 16% less fuel), when delivered, will transform our cost base and our business for the next decade. Due to these delivery delays, we won't see any of these cost savings until late financial 2021."
As a result , Ryanair is extending its 200 million yearly passenger target by "at least" one or two year to financial 2025 or financial 2026.
Looking towards financial 2020, Ryanair is guiding for profit after tax between EUR950 million and EUR1.05 billion, based on strong Christmas and New Year travel bookings.
For the financial year that ended March 31, 2019, Ryanair reported pretax profit of EUR948.1 million on group revenue of EUR7.69 billion.
Fourth-quarter bookings are up 1% on the year before, the airline said, with "slightly better" than expected average fares. Ryanair expects full-year traffic to grow by 8% to 154 million passengers, with revenue guided 3% to 4% higher.
The airline also expects its fuel bill to rise by EUR440 million from the EUR2.42 billion recorded in financial 2019.
Shares in Ryanair were up 4.1% in London on Monday at EUR15.46 each.
By Paul McGowan; [email protected]
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