Ryanair Doubles Profits Forecast

Rising high on its unexpected third-quarter profit, Ryanair Holdings Plc, Europe's largest no-frills airline, raised its profit forecast for the full year.

For the quarter ended December 31, Ryanair's net profit rose 30 percent to US$61.8 million and sales rose 33 percent to US$638.4 million. The airline claimed that it now expects full-year profit to rise 29 percent to US$505 million, nearly double its previous forecast.

Chief Executive Officer Michael O’Leary attributed the rise in profits to the introduction of baggage fees in March last year which helped offset higher third-quarter fuel costs. He also predicted a 25 percent increase in passengers in the current quarter.

A jubilant O'Leary said, “This exceptional 30 percent increase in third-quarter profits during a period of higher oil prices, intense competition, and 21 percent seat capacity growth demonstrates, yet again, the robustness of Ryanair's lowest fare model.''

The Dublin-based carrier claimed that the passenger numbers grew by 19 per cent, with 10.3 million patrons travelling with the airline in the three months to December 31, up from 8.6 million in the previous year.

The load factor, or proportion of seats filled, averaged 82 percent in the period compared with 84 percent a year earlier.

Ryanair further claimed that it is the only airline in Europe that doesn't charge a fuel surcharge. Fuel surcharges allow airlines to offset higher oil prices by passing the cost on to customers. The airline spent 174.9 million euros on fuel in the period, 52 percent more than a year earlier

Deputy Chief Executive Officer Michael Cawley said that not levying unnecessary surcharge is driving the demand for their business.

There is no doubt that airline has also profited from the delays and troubles that have hit main carrier British Airways in the past few months.