As full-service operators are struggling to stem losses, Ryanair continues the expansion of its in-your-face cut-rate service in unexpected markets.
Ryanair Holdings Plc, Europe’s biggest discount airline, boosted full-year profit 13 percent as it added routes and planes to target short-haul markets in which full-service operators are struggling to stem losses.
The Dublin-based carrier’s earnings after tax rose to 569 million euros ($731 million) in the 12 months to March 31, minus one-time items, from 503 million euros a year earlier, it said today in a statement. Ryanair said Jan. 28 it expected to post a profit close to 540 million euros, while analysts had expected 560 million euros, based on the average of 19 estimates.
Chief Executive Officer Michael O’Leary, who has occupied the role for almost two decades, said last week he’ll probably stay for another five years to consolidate Ryanair’s European dominance as network carriers increasingly exit short-haul flying. The Irish company added 5 percent more passengers in the year for a total of 79.3 million while lifting occupancy levels.
While traffic growth this summer “will be very modest,” O’Leary said Ryanair will ground fewer aircraft than usual next winter, boosting the passenger total by 2 million people for the year to 81.5 million and lifting earnings to between 570 million euros and 600 million euros.
Shares of Ryanair have gained 34 percent this year, valuing the company at 9.16 billion euros. EasyJet Plc, Europe’s second- largest discount airline, has added 55 percent as it lures more business passengers with higher frequencies and paid-for perks.
Ryanair’s full-year revenue rose 13 percent to 4.33 billion euros and the carrier added 15 aircraft, taking the fleet to 305 planes as of the year’s end. It also opened 217 new routes to take the total to more than 1,600 and established seven new bases in Greece, the Netherlands, Morocco, Poland and Croatia.
Net income this quarter will be lower than last year, mainly due to the timing of the Easter break, the carrier said.
Ryanair is expanding as network carriers including Air France-KLM Group, Deutsche Lufthansa AG and British Airways parent International Consolidated Airlines Group SA undergo the latest revamp of unprofitable short-haul flights — an experiment that O’Leary predicts will fail.
Ryanair sought to consolidate its grip in Ireland when it revived a bid to buy Aer Lingus Group Plc last June.
The offer, which valued the smaller company at 694 million euros, was blocked in February by European Union regulators who ruled it would increase fares and reduce choice. A separate inquiry by the U.K. Competition Commission may require Ryanair to reduce or dispose of a remaining 30 percent holding.
Ryanair ordered 175 Boeing Co. 737-800 single-aisle jets in March and has appointed a team to work on a follow-up deal to add a further 100, most likely the U.S. company’s new 737 Max model, giving a total list price of more than $20 billion.
–Editors: Chris Jasper, Andrew Noel.
To contact the reporter on this story: Kari Lundgren in London at [email protected]
To contact the editor responsible for this story: Benedikt Kammel at [email protected]
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