Monday, January 28 07:24:35
Ryanair increased its full-year profit forecast today on better than expected fare growth in Northern Europe, but Europe's top low-cost airline said passenger numbers would rise modestly next year due to a lack of plane deliveries.
The Dublin-based airline hiked its profit forecast to 540 million euros ($728 million) after tax in the year to March, up from an earlier estimate of between 490 million and 520 million.
It made a profit of 18 million euros in the traditionally weak three months to December thanks to a stellar 8 percent rise in average fares, way ahead of the 3 percent average forecast by three analysts polled by Reuters. Revenue was up 15 percent to 969 million euros.
"We saw strong demand out of the UK, out of Germany and out of Scandanavia and that has gone straight to our bottom line," Chief Operating Officer Michael Cawley told Reuters. "We are still struggling to understand it, to be honest."
Average fares will grow at a slower pace in the three months to March, he said.
Next year fares will continue to rise though capacity will likely only grow by 2-3 percent in the financial year to March 2014, he said, down from the 4 percent rise forecast in the current year, due to the lack of new plane deliveries planned.
While many airlines have been hit hard by Europe's struggling economy and high fuel costs, Ryanair has fared better than most, thanks to its size and focus on low costs and low prices.
Its chief low cost rival easyJet last week also posted strong results in the last quarter of the year, with revenue growth of 9.2 percent.
Ryanair shares closed on Friday at 5.50 euros, up 16 percent since the start of the year compared to a 5 percent increase in the broader Irish market. ( C) Reuters