Ryanair Books 6 Percent Profit Increase

Ryanair reported a full year net profit of EUR€1.32 billion (USD$1.47 billion), up 6 percent on the previous year’s €1.24 billion.

The full year profit to end March came on the back of a 13 percent average cut in fares, Ryanair said, as unit costs fell 11 percent during the period. Revenue edged up 2 percent to €6.65 billion.

Ryanair chief executive Michael O’Leary said the increased profit came “despite difficult trading conditions in FY17 caused by a series of security events at European cities, a switch of charter capacity from North Africa, Turkey and Egypt to mainland Europe, and a sharp decline in sterling following the June 2016 Brexit vote.

“We reacted to these challenges by improving our customer experience, and stimulating growth with lower fares,” he added.

The 13 percent drop in air fares led to a 2 percent fall in scheduled revenues to €4.87 billion, but a 13 percent lift in ancillary revenues to €1.78 billion pushed total revenue up 2 percent. The increase in ancillary revenue to 27 percent of the total was driven by a solid performance in reserved seating, priority boarding, car hire and on-board sales, the airline said.

Expenses edged up 1 percent to €5.1 billion, with fuel costs falling 8 percent to €1.91 billion due to lower euro denominated fuel prices. Unit costs fell 11 percent, ex-fuel they were down 5 percent.

Operating profit came in at €1.53 billion, a 5 percent increase on the previous year.

The low cost carrier flew 120 million people during the year, a 13 percent increase, with load factor rising one percentage point to 94 percent.

Looking forward, Ryanair expects to grow its passenger numbers by 8 percent to 130 million in the current financial year. Average fares are expected to continue to fall, by between 5 and 7 percent, due to weaker sterling and excess capacity in Europe.

Unit costs, ex fuel, are expected to fall by 1 percent, with a €70 million expected saving on fuel.

The airline’s profit guidance for the year is for an 8 percent increase in net profit to between €1.4 billion and €1.45 billion, but Brexit and further “security events” could damage consumer confidence and bookings it said.