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Travel industry news

20 May 2019

BY Jennifer Morris

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Ryanair reports profits down 29% on lower fare value

Ryanair has reported full-year after tax profit down 29% to €1.02 billion, citing a decline in fare value.

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Ryanair added its outlook for full-year 2020 remained “cautious on pricing”

The results, which excluded Lauda, also reported strong traffic growth, up 7% to 139 million, but the airline said this was offset by a 6% decline in fare value.

 

Ancillary growth of 19% was also offset by higher fuel, staff and EU261 (compensation) costs, Ryanair said.

 

The airline’s chief executive Michael O’Leary said: “Short-haul capacity growth and the absence of Easter in Q4 led to a 6% fare decline, which stimulated 7% traffic growth to over 139 million.”

Revenues rose 6% to €7.6 billion.

 

On the grounding of the Boeing 737 Max model aircraft, Ryanair said it had delayed the delivery of its first five to winter 2019 (subject to regulatory approval by Easa).

 

“We continue to have utmost confidence in these aircraft which have 4% more seats, are 16% more fuel efficient and generate 40% lower noise emissions,” the airline said in a statement.

 

“They are hedged at an average €/$ rate of 1.24 out to full-year 2024, and will deliver significant unit cost savings for the next five years, although the delayed deliveries in 2019 means that we will not see any meaningful cost benefit until full-year 2021.”

Ryanair added its outlook for full-year 2020 remained “cautious on pricing”.

 

“Traffic will grow by 8% to 153 million.

 

“Assuming revenue per passenger (RPP) growth of 3%, we are guiding broadly flat group profits.

 

“This will range from €750 million if RPP rises 2%, up to €950 million if RPP rises 4%.”

 

The airline added while first-half bookings were slightly ahead of last year, fares were lower and it expected this trend to continue through summer 2019.

 

“Costs will increase as our full-year fuel bill jumps by another €460 million.

 

“This guidance is heavily dependent on close-in peak summer fares, second half prices, the absence of security events, and no negative Brexit developments.”

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