Ryanair set for strong growth as rivals cut back

Ryanair CEO Michael O'Leary
Ryanair CEO Michael O'Leary
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Ryanair raised its full-year profits guidance yesterday after more than doubling first- quarter earnings and setting out aggressive plans for expansion in Europe.

Chief executive Michael O’Leary said it was “overrun with growth offers” from airports on the continent as rivals scaled back operations.

But he warned against “irrational exuberance” as the second half of the financial year was likely to see downward pressure on fares as a result of competition and Ryanair’s increased capacity.

Profits after tax for the Dublin-based carrier in the first quarter to June 30 were up 152 per cent to 197 million euros (£156m) though Mr O’Leary said this was distorted by the absence of Easter in the same period last year.

The carrier said more passengers, fuller flights and shaved costs meant full-year earnings were now expected at 620-650 million euros (£491-£514m), up from 580-620 million euros (£459-£491m).

For the first quarter, passenger numbers were up 4 per cent to 24.3 million and they travelled on planes that were 86 per cent full after a rise in load factor of 4 per cent.

Revenues were up 11 per cent to 1.34 billion euros (£1.06bn) as fares rose 9 per cent, boosted by a strong Easter period.

The carrier managed to raise “ancillary” revenues by 4 per cent as reductions in airport and baggage fees were offset by a rising uptake of allocated seating.

Mr O’Leary said four new bases at Athens, Brussels, Lisbon and Rome were “performing strongly” with new bases due to open this winter at Cologne, Gdansk, Warsaw and Glasgow.

New routes and frequencies at Stansted and Dublin are due to increase “substantially”.

Mr O’Leary added: “We are overrun with growth offers from primary European airports whose incumbent flag and regional carriers continue to cut capacity and traffic.

“These new airports along with our existing 69 bases offer Ryanair significant growth opportunities as the first of our 180 new Boeing order delivers this September.”