To Range Of €1,175m To €1,225m As “Always Getting Better” Programme Delivers Stronger Traffic And Fares
Ryanair today (9 Sept) issued a trading statement raising its full year Net Profit guidance by 25% from a current range of €940m to €970m to a new range of €1.175bn to €1.225bn due to stronger than expected peak summer traffic and prices as its “Always Getting Better” (AGB) customer experience programme continues to win millions of new customers at slightly higher than expected air fares.
Ryanair had originally planned to update shareholders on current trading at its 24 Sept AGM, however the strength of its July and August numbers is continuing into September and the scale of the upgrade (40% up on prior year) requires this update to be brought forward. The main drivers for this improved guidance are:-
- H1 traffic growth of 13% (previously guided 10%).
- H1 fares up over 2% (previously guided flat).
- Q3 traffic growth of 15% expected (previously guided 13%).
- Q3 fares now expected to be flat (previously guided -4% to -8%).
- FY16 traffic increased to 104m (previously 103m).
- Lower than expected prices for unhedged fuel in FY16 (10% of volume).
Ryanair cautioned that its full year result remains heavily dependent on close-in bookings in Q3 (currently 30% sold) and Q4 (currently zero visibility). Ryanair continues to expect downward pressure on fares and yields this winter as it grows strongly in major EU markets such as Germany, at a time when competitors will begin to benefit from lower oil prices as historic hedges unwind.
Ryanair also confirmed that it has successfully recovered all of the funds (less than $5m) that were the subject of a fraudulent electronic transfer to a Chinese bank in April. As previously noted, steps have been put in place to ensure that such a transfer cannot recur.
Ryanair’s Michael O’Leary said:
“We have been surprised by the strength of close-in bookings and fares this summer during which we delivered record 95% load factors in both July and August while fares grew by over 2%, when we had expected them to be flat. During a year when Ryanair will grow traffic by more than 13m customers p.a. it’s clear that consumers all over Europe are delighted by and are switching to, our “Always Getting Better” (AGB) customer experience programme, our industry leading punctuality and our unbeatable low fares.
We would caution that not all of this improvement is due to either our model or our management. As a “load factor active/yield passive” airline we have clearly benefited from favourable industry trends this summer including bad weather in Northern Europe, stronger sterling encouraging more UK families to holiday in the Med, reasonably flat capacity across the EU industry and lower prices for our unhedged oil. Being the airline industry we do not expect these favourable conditions will persist, and we would urge shareholders and analysts to avoid irrational exuberance while we continue to execute our very ambitious growth plans during what we expect to be very attritional and sustained fare wars across Europe this winter”.
09 Sep 2015