Ryanair’s profits drop 21%
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Ryanair has seen its profits fall 21% to EUR78 million (US$103m, GBP67m) for the first quarter of this year citing higher fuel costs and Easter’s movement for the decline.
The low-cost carrier carried 3% more passengers during the first quarter up to 30 June to a total of 23.2 million with its revenue up 5% to EUR1.34bn.
Its add-ons including reserved seating, priority boarding and higher credit card fees helped boost ancillary sales by 25% to EUR357m, making up 27% of the airline’s revenue. Its fuel costs went up 6% to EUR577m, taking up 47% of Ryanair’s costs.
Ryanair’s CEO Michael O’Leary said its seven new bases in Europe continue to perform well and will now target new base openings in Germany, Italy, Spain, Poland and Scandinavia where locally based carriers are cutting back. He added talks with Stansted continue.
“We plan to announce more new routes and new bases later this year as we exploit significant growth opportunities in markets where competitors including Air Berlin, Alitalia, Iberia, LOT, and SAS are cutting back. We are in ongoing negotiations with MAG, the new owners of Stansted airport to reverse six years of record traffic declines, but there is no guarantee that any deal will be agreed,” said O’Leary in a statement.
Summer bookings for the airline are said to have slowed in recent weeks due to the heat in Europe but expects its Q2 yields to rise overall.
“As ever, our outlook remains cautious for the full year as market conditions are tough with recession, austerity, high fuel costs, and excessive Government taxes (most recently in Belgium) impacting air travel demand and yields. While we expect full year traffic to grow 3% to 81.5m, we still have no visibility over next winter’s yields, and on the basis that the recent yield weakness in close-in summer bookings does not continue, we see no reason to change our full year profit after tax guidance which remains at between €570m to €600m,” its statement read.
The carrier used its Q1 statement to reiterate its willingness to sell its stake in Aer Lingus.
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