Ryanair's full-year profit up 10% despite cancellations

Grant Boone
May 22, 2018

The Irish based company said post-tax profits rose by 10 percent to €1.45bn for the year 2017-2018.

Ryanair said passenger numbers had risen by 9 percent to 130.3 million in the 12 months to the end of March with Germany, Italy and Spain showing the biggest increase in flights.

It warned they included a potential €400m rise in fuel bills as oil prices continue to climb despite it being 90% hedged.

According to Platts data and the International Air Transport Association (IATA), as of May 11, 2018, jet fuel prices globally were 54.2 percent higher than at the same time past year, 5.4 percent higher compared to a month ago, and 3.7 percent higher than the previous week.

Ryanair also pointed to rising staffing costs.

Profits have jumped 10pc at Ryanair for the last 12 months to March.

'If that continues to build, it's something we may have to look at again'.

Low-priced carrier Ryanair has reported soaring annual profits this morning, but has warned its earnings will fall back in the next year due to higher costs and flat fares.

O’Leary discusses earnings oil prices expansion merger plans and Brexit
O’Leary discusses earnings oil prices expansion merger plans and Brexit

The likes of IAG and Lufthansa have created airline groups with multiple brands and CEO Michael O'Leary thinks that model is something Ryanair could copy.

O'Leary said LaudaMotion was an attractive opportunity as it is an Airbus operator, and we are looking for opportunities to grow its Airbus fleet to 30-50 aircraft over the next five years. The discount giant has purchased a 24.9 percent stake which it wants to increase to 75 percent, subject to European Union antitrust approval.

Despite the costs, Ryanair is not expected to raise its fares, as it would impact the carrier's load factor, which has risen to a 95 percent average for the carrier's entire operation.

"This will lead to a modest increase in ex-fuel unit costs next year but will underpin our growth to nearly 600 aircraft and 200m guests per annum by FY24, " O'Leary said.

"The thinking is Ryanair Holdings will evolve probably into a holding company not dissimilar to IAG over the next two to three years, O'Leary said on an earnings call with analysts after the release of the company's full-year results on Monday".

Ryanair was forced to scrap more than 20,000 flights in September after botched crew rotas left it without sufficient staff to crew all of its planes.

"Our Outlook for FY19 is on the pessimistic side of cautious", Ryanair said.

The downbeat tone was in stark contrast to Europe's second-biggest low-priced airline, easyJet, which said last week that it anticipated profits would rise more than 30 percent this year as it benefits from robust travel demand and the collapse of some smaller rivals.

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