Ryanair profits up despite fuel jump
Monday, 6 February 2006Budget airline Ryanair has reported adjusted profits after tax of €36.8m for the three months to the end of December, up 6% on the same period a year earlier. This followed an €11.9m charge linked to its acquisition of Buzz, which was required because of a change in accounting methods. Pre-tax profits rose from €40.6m to€50.6m.
Passenger traffic in the third quarter rose by 26% to 8.6 million, while total revenues were up 27% to €370.7m. The airline said its yields - or average fares - were flat, as expected. Costs increased by 3%,, but this was mainly because of 59% jump in fuel costs to €114.9m. Excluding fuel, Ryanair said costs fell by 6%. Ryanair increased seat capacity by 27%. Ancillary revenues grew by 31%.
Chief executive Michael O'Leary said the airline's model had proved that it could increase profits and passenger traffic during difficult trading conditions. On fuel, he said Ryanair was hedged at rates equivalent to $49 a barrel to the end of March, but was unhedged after that. Mr O'Leary said the airline would continue to monitor prices with a view to hedging future requirements for 2007.
For the fourth quarter, he said yields would fall by between 5% and 10%.
Ryanair shares closed 22 cent lower at €7.52 in Dublin this evening.
