Better treatment of customers means a better bottom line, according to Ryanair's first half results which show net profits ahead by almost a third over the six months to the end of September. The €795m in after-tax profit compares with €602m over the same period last year. Passenger numbers were up 4% to just over 51 million. Ryanair filled 89% of its seats through that six months - including the crucial Summer period - up from 85% a year ago. Average fares were up 5%.
The airline is also benefiting from lower oil prices. That, in combination with stronger-than-expected forward bookings, sees Ryanair substantially raise its guidance for full year profit. It now expects that number to come in at between €750-€770m, significantly ahead of the previous guidance of €650m.
Ryanair's chief financial officer Neil Sorahan says the big increase in the airline's full year guidance is due to a strong summer with its load factor - how many seats it fills on each flight - moving from 85% to 89%. Its forward bookings for the rest of the year are also "exceptionally strong". Ryanair is now expecting its passenger numbers to grow by 16% in the second half of the year as it plans to ground far fewer planes this year than it did last year. It is also increasing frequency from a number of key bases, including Stansted, while it is also increasing frequencies on a number of domestic routes, including in Italy.
Mr Sorahan says the falling price of oil is positive for Ryanair and it has extended its fuel hedges to 90% for 2016 at $93 a barrel. But the Ryanair CFO says the airline's average fare will fall 1% in the full year to €47. He says that Ryanair has shown over the years that it can thrive in a recession and it confident of taking on whatever economic situation may arise.
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MORNING BRIEFS - A deal between Diageo and Mexico's Jose Cuervo, which would see the latter take ownership of Bushmills whiskey brand, has been confirmed this morning. Diageo will swap Bushmills for a 50% stake in tequila brand Don Julio, which it will now own outright. In a statement, Diageo said the Mexican company Jose Cuervo had a "proven commitment to its people and to valuing the history and heritage of its brands - and it will continue to nurture Bushmills in the future".
*** Growth in the Irish manufacturing sector picked up during October, according to the latest monthly Investec Purchasing Managers' index. New export orders rose for the 16th month in a row and employment in the sector rose for the 17th month in a row as firms took on new staff to cope with rising demand.
*** Manufacturing firms are likely beneficiaries of euro weakness at least as far as export orders from the US are concerned. The dollar has hit a two year high against the euro. The single currency is trading at just under $1.25 this morning having dropped as low as one $24.4 in Asian trading. Compare that to the average euro/dollar exchange rate of just under $1.33 for 2013. The euro also buys just over 78 pence sterling.
