Ryanair has 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, attributed the loss to the 9% fall in average 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.”
The airline has stated that it expects the competitive environment to ease, saying that “market pricing remains soft but is no longer declining”. Ryanair is 90% hedged for FY14 at a cost of $980 per tonne (approx. $98 p.bl), with the airline taking advantage of recent oil prices and dollar weakness to extend hedge position to 90% for FY15 at $960 per tonne (approx. $96 per barrel), which together with the benefit of our euro/ dollar hedging programme will deliver fuel cost savings of approx. €80m in 2015.