Q3 results

http://www.ryanair.com/doc/investor/2014/q3_2014_pr.pdf

Extracts :

Ryanair today (Feb 3) reported a Q3 Loss of €35m, in line with previous guidance. Traffic grew 6% to 18m passengers. Revenue per passenger declined 6%, as strong ancillary revenue growth offset a 9% fall in fares. Excluding fuel, sector length adjusted unit costs fell by 9%. Ryanair’s full year profit guidance remains unchanged at approx. €510m.

“Ryanair’s Michael O’Leary, said:
“Our Q3 loss of €35m is in line with previous guidance and is entirely due to a 9% fall in ave fares and weaker sterling. We responded to this weaker pricing environment last September with seat promotions and lower fares which stimulated traffic across all markets resulting in 6% growth in Q3, and a 1% rise in monthly load factors. 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. Excluding fuel, Q3 sector length adjusted unit costs fell 9% as Ryanair continues to deliver industry leading cost control.

New Routes and Bases
Our new routes and bases are performing well this winter, albeit at weaker yields, as high fare competitors cut capacity and restructure. In December we opened 4 new Italian bases in Rome (Fiumicino), Catania, Lamezia, and Palermo in response to concerns about Altalia and its high fare domestic routes. We announced 4 new bases for spring 2014 at Brussels (Zaventem) which opens February 28, Athens and Thessaloniki (April 1) and Lisbon (April 2). Advance bookings on these new routes are well ahead of expectations, with customers welcoming Ryanair’s lower fare alternative. We expect these new bases to provide substantial growth opportunities for Ryanair, particularly as we commence deliveries in September 2014 of our new 175 Boeing 737-800 NG aircraft order. Over the next 5 years, as Ryanair grows from 80m to over 110m customers p.a., we expect a substantial portion of this growth will be at primary airports, where high fare incumbents are financially weak and restructuring, and the remainder arising at secondary airports driven by attractive low cost growth incentives.

Full Year Guidance.
Market pricing remains soft but is no longer declining. We reacted quickly to last autumn’s weakness with a range of lower fares, seat promotions, and recently increased advertising and marketing spend. As a result forward bookings in Q4 and into FY’15 are running significantly ahead of last year, albeit at weaker yields. We expect our strategy of lowering fares and increasing forward bookings will enable us to better manage close in bookings and yields as we move into summer 2014. Thanks also to the earlier launch of new bases in Italy and Brussels (Zaventem), and rising load factors we expect FY’14 traffic to rise to 81.5m, slightly higher than previously guided. Advance bookings for Q1 FY’15 are significantly higher than this year’s comparable, even allowing for the impact of Easter. Based on current visibility, we expect Q4 yields to decline by approx. 8%, slightly better than the 10% decline previously guided. As full year traffic will be slightly stronger, and our focus on cost control delivers a 4% fall in Q4 (ex-fuel) unit costs, we are now confident that the full year net profit outturn will finish in the range of €500m to €520m as previously guided.