In announcing the results, Ryanair's chief executive, Michael O'Leary said that the results were distorted by a 42% reduction in fuel costs over the same period last year when the airline admitted that it got it's hedging policy wrong. For the quarter, the airline's net profit margin grew to 18% which helped boost cash reserves to €2.5bn at quarter end. Ancillary revenue also grew to €165.3m, an increase of 13%.
In relation to the €10 travel tax imposed by the Irish Government this spring, Mr. O'Leary said that the airline expects to see the full impact of the measure this winter when it foresees traffic in the Irish market declining by 20%. On the same subject, the airline's deputy chief executive Michael Cawley, speaking on RTE Radio's 'Morning Ireland' said that it would be a further two weeks before the winter schedules were completed, adding that significant reductions in service at Dublin and Shannon could be expected, directly attributable to the travel tax.
Looking forward, Ryanair's guidance on full year profits for fiscal 2009 is closer to the bottom end of €200m to €300m than previous indications. The airline's share price fell 8.5% as a result.
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EasyJet has just announced its results for the lasttrimester. Their revenues hit a high of £721m. After Ryanair, this is the second low cost model airline to prove that it’s possible, even in tough economic times, to make a profit. For EasyJet, all the indicators are green : especially that of profitability, most important in the low cost model.
I think the most important figure to check is the profitability per seat. For easyJet, it increased of 10,9% to £51,42 while Ryanair “projected yield decline of over 20% for the 12 months to March 31st 2010.“
According to the Centre for Asia Pacific Aviation, this mainly explains why Ryanair’s shares fell yesterday. The market reacted positively to easyJet results, which rose more than 3%.
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