Ryanair Delivers Q3 Profit of €15M

Written by TravelObserve.com | 02 February 2012

Ryanair, the world’s favourite airline today (Jan 30) announced a Q3 profit of €15m compared to a Q3 loss of €10m last year. Revenues increased 13% to €844m as traffic fell 2% and ave. fares rose 17%. Unit costs rose 11% due to a 7% increase in sector lengths and an 18% increase in fuel costs. Excluding fuel, sector length adjusted unit costs declined by 1%.

Announcing these results, Michael O’Leary, said:

“We are pleased to report a Q3 profit of €15m which is ahead of expectations due to benign weather conditions in December (compared to widespread snow closures and deicing in Dec 2010) and a better yield performance as we grounded 80 aircraft and cut traffic by 2%. The 17% rise in ave. fares (which includes our optional baggage fees) is due to reduced seat capacity, longer sectors, and higher competitor fares/fuel surcharges. Ancillary revenues grew 6% to €177m and rose by 8% on a per pax basis. We extended our successful reserved seat service to all routes from January 10th. 

Our new routes and bases have performed well this winter. We open 5 new bases in Baden Baden (Ger), Billund (Den), Palma (Spain), Paphos (Cyprus) and Wroclaw (Poland) in March/April 2012. We expect to launch at least 1 more base for summer 2012, shortly. 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, as large and smaller airports across Europe compete aggressively to win Ryanair’s growth. 

Unit costs rose 11% mainly due to an 18% increase in fuel costs. Excluding fuel, sector length adjusted unit costs fell 1%, as we aggressively controlled costs despite a 2% basic pay increase, higher Eurocontrol fees, and substantially higher Dublin Airport charges. In FY13 we are 90% hedged for H1 at $990 per tonne (approx. $99 per barrel), and 70% hedged for H2 at approx. $100 pbl. We expect to hedge the balance of our H2 2013 needs over the coming months. However, at these prices our fuel bill for FY 2013 will rise by approx. €350m which poses a significant cost challenge for next year. 

The BAA’s recent announcement that it will pay dividends of £240m this year to Ferrovial and its other shareholders is further evidence that it is generating monopoly profits under the CAA’s “inadequate” regulatory regime. Over the past five years while Stansted charges have doubled, traffic has declined 26% from over 24m in 2007 to just 18m in 2011. The BAA monopoly’s shareholders are being unfairly enriched at the expense of Stansted airport users who continue to suffer high charges and inadequate service. We again call on the UK government and the CAA to bring forward the sale of Stansted to enable competition between London airports to deliver lower airport charges and improved customer service where the BAA airport monopoly and CAA’s “inadequate” regulatory regime has repeatedly failed.

Read the full release at Ryanair.com

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