Ryanair increased its 2011 profit forecast by 10% today, saying higher revenues per passenger mile would offset higher fuel prices. Ryanair said it had seen virtually no impact from the downturn in consumer confidence, but warned traffic would fall in the coming months as it grounded aircraft as a result of high fuel prices.
The airline said it expected to make a profit before tax of €440 million ($605 million) for its 2011 financial year, up from its previous forecast of 400 million. Passenger yield is forecast to grow to 14% in Q4, up from 12% previously forecast.
Chief Financial Officer Howard Millar said: "We are well booked for the coming months; fractionally ahead of where we were last year…So far we have not seen any impact from recession."
So we are starting to see a mirror image of 2008/2009 when premium passenger numbers fell sharply while low-cost airlines continued to show growth. A worrying trend indeed for all those airlines who rushed to extend their premium compartments in 2010.
Where is all the money? The Boeing advantage
Boeing announced Friday that it had over 600 commitments in place for the 737 Max. So we know that a number of companies, be they airlines, lessors or investors have paid a deposit to secure their order slots for the 737 Max. And yet, in this uncertain environment there is no way of knowing if many of them will be in business come delivery date. Moreover the amount of trust shown towards Boeing and CFM for their drawing board products is staggering.
Boeing also confirmed that 737 production would ramp up from 31.5 a month now to 35 a month in 2012, 38 in 2013 and 42 by the end of 2013. This is not such good news for the market. At a time when everyone is struggling for funding delivery gluts is the last thing the industry needs. Of course it is when the money starts to dry-up that Boeing’s advantage begins to show. The European Export Credit Agencies are not banks whereas of course Ex-Im Bank in the USA is ensuring that Boeing deliveries in many instances gain an additional layer of possible support.