Morning business news - February 3Monday 03 February 2014 10.48
Ryanair has reported a loss of €35m for the months of October, November and December, in line with analysts' and the airline's own forecasts. It said that over the three month period, its third financial quarter, traffic grew by 6% to 18 million passengers, but that revenue per passenger fell by 6%. The airline's chief executive Michael O'Leary said the loss was entirely due to a 9% fall in average fares and weaker sterling. He said Ryanair responded to the weaker fares with seat promotions, which resulted in the 6% passenger growth. The airline's ancillary revenues grew by 13%, significantly faster than traffic growth due to strong customer uptake of reserved seating, priority boarding, and higher credit card fees.
Howard Millar, chief financial officer and deputy chief executive at Ryanair, says the market was "very soft" in the airline's fiscal third quarter with reduced passenger revenues and higher fuel prices. But he said that the airline is well ahead of where it was this time last year, while it is also 90% hedged for its fuel prices for this year. Mr Millar said that the airline is investing heavily in its IT services, which he said is already paying off with a 1% rise in its load factor expected.
Ryanair is also working to broaden its distribution base and to this end, it has agreed to a deal to partner with Google's European flight search service, which is available in the UK, France, Germany, Italy, Holland and Spain and with more countries to follow. Mr Millar says that Google will be the "engine of choice" for consumers as they search for low fares. Looking ahead, Mr Millar says that the airline sector is recovering. He says that despite prices remaining "soft" they have stopped declining. Ryanair's advanced booking are currently very strong and are being driven by the new website and its customer relationship developments, he added.
MORNING BRIEFS - Irish manufacturing activity grew for the eighth month in a row January, but at a slightly slower pace than in December. According to the Investec Manufacturing Purchasing Managers' index, even though production growth slowed in January, new orders remained relatively robust, with improved demand reported from both domestic and export customers, with the UK market a source of particular strength.
*** Multinational pharmaceutical company Alexion will create 40 jobs in Athlone later this year having bought a vialling site there. Last July Alexion announced plans to open a new office and laboratory facility in Dublin and to set up a global supply chain facility.
*** Porsche's chairman Wolfgang Porsche and board member Ferdinand Piech are being sued by seven hedge funds over its failed takeover bid for Volkswagen. The hedge funds are looking for €1.8 billion in compensation, accusing Porsche of misleading markets in the run-up to its takeover bid for VW in 2008. Porsche initially dismissed speculation it was seeking to takeover VW, but later revealed that it owned or had positions on almost 74% of VW shares. But, Porsche's disclosure of an increased holding triggered an unprecedented stock market squeeze on VW shares as investors rushed to buy them to cover their short positions.
*** a report in today's New York Times says that facial recognition technology, mainly used now in shops for identifying shoplifters, could soon be used to identify and track the biggest spenders. The NEC corporation is woking on "VIP identification" software based on face recognition for hotels and other businesses where there is a need to identify the presence of important visitors.