Ryanair has raised its profit guidance again on the back of a strong performance in its third financial quarter.
The airline is now looking at full year profit of around €850m - that is up from the €810-830m range it was previously expecting.
Ryanair today reported a profit of €49m in the three months to the end of December - up substantially on the loss of €35m the same time last year.
Revenue for the three month period was 17% higher at €1.13 billion, while passenger numbers rose by 14% to 20.8 million from 18.3 million. Average fares increased by 2% to €40.
The airline said it expects traffic to grow by 25% in the three months to the end of March, up from a prior estimate of 20%, while fares would fall by 6-8%.
Unit costs for the full year are likely to fall by 5% due to lower oil prices.
The airline said it would embark on a €400m share buyback programme later this month and it is paying out a special dividend at the end of the month.
Despite the raised profit forecasts for this year, Ryanair cautioned that profit growth will be modest next year as rivals' cheaper fuel push fares down.
Ryanair will benefit only slightly from lower jet fuel costs this year as it has hedged 90% of March 2016 fuel needs at $92 a barrel, about double the current price after benchmark Brent crude plummeted in recent months.
It said today it had hedged 35% of full year 2017 at a much lower $68 a barrel but cautioned shareholders to temper expectations for next year as the short term gain for its rivals who do not hedge out as far may lead to downward pressure on fares in 2015/16.
Ryanair said it also intends to pass on much, if not all, of next year's forecast 8% fall in fuel cost per passenger in the form of lower fares, raising the prospect of intense price competition among European airlines in the coming months.
Shares in the company were 6.1% lower in Dublin trade today.
"These strong results confirm that our 'Always Getting Better' customer programme and our expanded business schedules, coupled with our substantial fare and cost advantage over competitor airlines is drawing millions of new customers to Ryanair," commented the airline's chief executive Michael O'Leary.
On the proposed bid for Aer Lingus by IAG, Mr O'Leary said that he will not speculate about the proposal, other to say that the board of Ryanair will carefully consider any offer, should one by received, from IAG or any other party, in due course.
Ryanair holds a 29.9% stake in Aer Lingus.
Govt should adopt a more "intelligent" approach to sale of Aer Lingus stake, says Michael O'Leary CEO Ryanair pic.twitter.com/0oFZyWp06E
— David Murphy (@davidmurphyRTE) February 2, 2015