Traffic grew 12% to 35 million, with the airline citing its lower fares and Always Getting Better customer satisfaction improvement programme as contributing factors.
Ryanair said the cost gap between it and competitor airlines continues to widen and it delivered a 6% unit cost reduction in quarter one as its fuel bill fell despite a 12% increase in traffic.
It added that its full-year 2018 fuel is 90% hedged at about $49 per barrel and “will deliver significant savings this year”. It added that it took advantage of recent price dips to increase its first half full-year 2019 hedging to about 45% at $48 per barrel. “We expect these fuel savings will be passed back to Ryanair customers through lower fares,” said the airline.
Ryainair also reiterated its concern about the uncertainty which surrounds the UK terms of Brexit.
It said: “While we continue to campaign for the UK to remain in the EU open skies agreement, we caution that should the UK leave, there may not be sufficient time, or goodwill on both sides, to negotiate a timely replacement bilateral which could result in a disruption of flights between the UK and Europe for a period of time from April 2019 onwards.
“We, like all airlines, seek clarity on this issue before we publish our summer 2019 schedule in the second quarter of 2018. If we do not have certainty about the legal basis for the operation of flights between the UK and the EU by autumn 2018, we may be forced to cancel flights and move some, or all, of our UK based aircraft to continental Europe from April 2019 onwards.”
In terms of outlook, Ryanair continues to guide first half average fares down about 5% as it grows first half traffic by almost 11% and checked bag revenue continues to steeply decline.
“Yield visibility into second half is zero and we see no reason at this time to alter our second half average fare guidance of an 8% decline,” said the airline.
Based on this, Ryanair continues to guide full-year 2018 profit after tax in a range of €1.40 billion to €1.45 billion.
“This guidance remains heavily dependent on close-in summer bookings, second half average fares, and the absence of any further security events, air traffic controller strikes or negative Brexit developments,” added the
airline.
Chief executive Michael O’Leary said: “We are pleased to report this 55% increase in profit after to €397 million but caution that the outcome is distorted by the absence of Easter in the prior year quarter one.
“While quarter one average fares rose by 1% to just over €40, this was due to a strong April (boosted by Easter) offset by adverse sterling, lower bag revenue as more customers switch to our two free carry-on bag policy, and yield stimulation following a series of security events in Manchester and London."
