E il commento di MOL:
Announcing these results Ryanair’s Chief Executive, Michael O’Leary, said:
“Ryanair’s lowest fare model, yet again, delivered increased profits and passenger growth for the quarter despite the intense competition and the drag on profitability of very high fuel prices. Underlying profit growth was strong at 22% as the comparative included the once off release of maintenance provisions related to the return of leased aircraft in November 2004. The Ryanair model has proven that during difficult trading conditions that it can increase profitability and generate significant passenger growth while many of our competitors are reporting falling profits or losing money.
As anticipated, yields were flat during the quarter despite a 27% increase in seat capacity and continued intense price competition across the route network. The multiple fuel surcharges imposed by European flag carriers remain, and have maintained the wide gap between their high prices and Ryanair’s low fares. Our “no fuel surcharges” guarantee to our passengers has enabled us to launch more new routes, deliver significant traffic growth and higher profits. Load factors, as expected, were 1 point lower driven by the 27% increase in seat capacity as we launched 34 new routes( total routes 303) and announced a significant expansion at our Dublin base, ( total bases 15). Ancillary revenues grew by 31% significantly faster than the growth in passenger volumes and we expect that they will continue to outpace traffic growth this year.
Unit costs increased by 3% primarily due to higher fuel costs. Excluding fuel, unit costs were reduced by 6% thanks to the addition of lower cost and efficient Boeing 737-800’s (we retired the last older Boeing 737-200 in December 2005), new lower cost airport and base agreements and continuing tight control over all other cost lines. We continue to focus aggressively on costs and anticipate that the cost reductions will continue to partially offset the significantly higher oil prices.
Our fuel costs rose by 59% to €115m despite being almost fully hedged during the quarter reflecting the high fuel prices. We are hedged to the end of March 06 at rates equivalent to $49 per barrel. We are unhedged thereafter but continue to monitor forward prices with a view to hedging our future requirements for fiscal 2007 should an appropriate opportunity arise. Our view remains unchanged insofar as we expect that fuel prices will continue at these higher levels for some time.
Our new routes and bases (Luton, Liverpool and Pisa) have performed well in their first winter whilst our yield performance at Shannon continues to be lower than originally expected. Our 14th base at Nottingham – East Midlands which was due to launch in March has been postponed to April due to the late aircraft deliveries arising from the Boeing strike. We also announced a major expansion of our Dublin base which commences in April with 5 additional aircraft and 18 new routes and these are already booking strongly. Ryanair continues to benefit from the cost savings and the economies of scale arising from our route development strategy of “connecting the dots”. We also continued to extend our lead over British Airways by carrying more passengers each month than they did on their entire worldwide network.
We continue to oppose the £4bn “marble palace” being proposed by BAA at Stansted. All the main airlines support a second runway, but believe that this should be delivered at a cost of £1bn or less. The recent dialogue with the BAA has conclusively demonstrated that their 76m passenger forecast for Stansted (current capacity 25m) has no basis in reality. The BAA £4bn budget is a monumental waste of passengers money and the BAA are also looking for a cross-subsidy from passengers at Heathrow and Gatwick to pay for this Taj-Mahal. If the CAA were an effective regulator, these plans would be shelved as they fail to meet the reasonable requirements of airport users, but sadly the CAA is a weak regulator whose bark is even more ineffectual than its toothless bite.
Our relentless focus on cost reduction continues. The launch of our Web Check-In, hand luggage only facility on March 16 will continue the low fare revolution pioneered by Ryanair in the early 1990’s. Web check-in will encourage passengers to travel with fewer bags and will enable Ryanair to reduce airport handling charges as we will need fewer check-in agents, desks, and baggage handlers. We plan to pass on these savings upfront to our passengers by reducing our average fare by £2.50 or €3.50 from 16th of March onwards. Web check-in passengers will further benefit by avoiding airport check-in and boarding gate queues. Passengers who wish to check-in bags will also benefit from these fare reductions and shorter queues at check-in but will pay £2.50 or €3.50 per checked in bag. We anticipate that the introduction of web check-in and at the same time increasing passengers baggage allowance to an industry leading 30kgs, will substantially reduce excess baggage charges. We estimate that the introduction of web check-in will be revenue neutral; however, we believe it will enable us to reduce Airport & Handling costs by up to €30m per annum.
We remain cautious in our outlook for the remainder of the fourth quarter. We expect to achieve significant increases in passenger volumes but also anticipate that yields in Q4 will fall reflecting our large capacity growth in this weakest winter quarter as well as the impact of Easter falling in April (it was in March last year). These factors should result in yields being towards the middle of the range of –5% to –10%, previously guided. Our full year net profit guidance is therefore unchanged. Intense competition in the market continues, however, Ryanair’s unique combination of the lowest fare in every market, lowest cost base and industry leading customer service including our recently announced web check-in initiative will enable us to continue to pioneer the next phase of the low fares revolution”.
Announcing these results Ryanair’s Chief Executive, Michael O’Leary, said:
“Ryanair’s lowest fare model, yet again, delivered increased profits and passenger growth for the quarter despite the intense competition and the drag on profitability of very high fuel prices. Underlying profit growth was strong at 22% as the comparative included the once off release of maintenance provisions related to the return of leased aircraft in November 2004. The Ryanair model has proven that during difficult trading conditions that it can increase profitability and generate significant passenger growth while many of our competitors are reporting falling profits or losing money.
As anticipated, yields were flat during the quarter despite a 27% increase in seat capacity and continued intense price competition across the route network. The multiple fuel surcharges imposed by European flag carriers remain, and have maintained the wide gap between their high prices and Ryanair’s low fares. Our “no fuel surcharges” guarantee to our passengers has enabled us to launch more new routes, deliver significant traffic growth and higher profits. Load factors, as expected, were 1 point lower driven by the 27% increase in seat capacity as we launched 34 new routes( total routes 303) and announced a significant expansion at our Dublin base, ( total bases 15). Ancillary revenues grew by 31% significantly faster than the growth in passenger volumes and we expect that they will continue to outpace traffic growth this year.
Unit costs increased by 3% primarily due to higher fuel costs. Excluding fuel, unit costs were reduced by 6% thanks to the addition of lower cost and efficient Boeing 737-800’s (we retired the last older Boeing 737-200 in December 2005), new lower cost airport and base agreements and continuing tight control over all other cost lines. We continue to focus aggressively on costs and anticipate that the cost reductions will continue to partially offset the significantly higher oil prices.
Our fuel costs rose by 59% to €115m despite being almost fully hedged during the quarter reflecting the high fuel prices. We are hedged to the end of March 06 at rates equivalent to $49 per barrel. We are unhedged thereafter but continue to monitor forward prices with a view to hedging our future requirements for fiscal 2007 should an appropriate opportunity arise. Our view remains unchanged insofar as we expect that fuel prices will continue at these higher levels for some time.
Our new routes and bases (Luton, Liverpool and Pisa) have performed well in their first winter whilst our yield performance at Shannon continues to be lower than originally expected. Our 14th base at Nottingham – East Midlands which was due to launch in March has been postponed to April due to the late aircraft deliveries arising from the Boeing strike. We also announced a major expansion of our Dublin base which commences in April with 5 additional aircraft and 18 new routes and these are already booking strongly. Ryanair continues to benefit from the cost savings and the economies of scale arising from our route development strategy of “connecting the dots”. We also continued to extend our lead over British Airways by carrying more passengers each month than they did on their entire worldwide network.
We continue to oppose the £4bn “marble palace” being proposed by BAA at Stansted. All the main airlines support a second runway, but believe that this should be delivered at a cost of £1bn or less. The recent dialogue with the BAA has conclusively demonstrated that their 76m passenger forecast for Stansted (current capacity 25m) has no basis in reality. The BAA £4bn budget is a monumental waste of passengers money and the BAA are also looking for a cross-subsidy from passengers at Heathrow and Gatwick to pay for this Taj-Mahal. If the CAA were an effective regulator, these plans would be shelved as they fail to meet the reasonable requirements of airport users, but sadly the CAA is a weak regulator whose bark is even more ineffectual than its toothless bite.
Our relentless focus on cost reduction continues. The launch of our Web Check-In, hand luggage only facility on March 16 will continue the low fare revolution pioneered by Ryanair in the early 1990’s. Web check-in will encourage passengers to travel with fewer bags and will enable Ryanair to reduce airport handling charges as we will need fewer check-in agents, desks, and baggage handlers. We plan to pass on these savings upfront to our passengers by reducing our average fare by £2.50 or €3.50 from 16th of March onwards. Web check-in passengers will further benefit by avoiding airport check-in and boarding gate queues. Passengers who wish to check-in bags will also benefit from these fare reductions and shorter queues at check-in but will pay £2.50 or €3.50 per checked in bag. We anticipate that the introduction of web check-in and at the same time increasing passengers baggage allowance to an industry leading 30kgs, will substantially reduce excess baggage charges. We estimate that the introduction of web check-in will be revenue neutral; however, we believe it will enable us to reduce Airport & Handling costs by up to €30m per annum.
We remain cautious in our outlook for the remainder of the fourth quarter. We expect to achieve significant increases in passenger volumes but also anticipate that yields in Q4 will fall reflecting our large capacity growth in this weakest winter quarter as well as the impact of Easter falling in April (it was in March last year). These factors should result in yields being towards the middle of the range of –5% to –10%, previously guided. Our full year net profit guidance is therefore unchanged. Intense competition in the market continues, however, Ryanair’s unique combination of the lowest fare in every market, lowest cost base and industry leading customer service including our recently announced web check-in initiative will enable us to continue to pioneer the next phase of the low fares revolution”.