Ryanair Slips To Loss On Lower Fares, Reaffirms Full-year Profit View

(RTTNews) - Irish low-cost airline Ryanair Holdings Plc. (RYA.L, RYAAY) Monday reported a loss for the third quarter, compared to a profit last year, reflecting 9 percent fall in average fares and weaker sterling. Revenues were flat, while traffic improved and ancillary revenues climbed 13 percent from the prior year. The company forecast an unchanged profit for the full year.

According to the company, its new routes and bases are performing well this winter, and expects these new bases to provide substantial growth opportunities for Ryanair. The market pricing remains soft but is no longer declining, the firm added.

CEO Michael O'Leary said, "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."

Loss attributable to equity holders of parent was 35.2 million euros, or 2.50 euro cents per share, compared to a profit of 18.1 million euros or 1.25 euro cents per share in the prior year.

Loss before tax was 41.8 million euros, compared to a profit of 19.3 million euros a year earlier.

Total operating revenues slightly declined to 964.4 million euros from 968.8 million euros reported last year, reflecting 9 percent decrease in average fares, offset by a 13 percent rise in ancillary revenues and a 6 percent increase in passenger numbers.

Traffic grew 6 percent to 18 million passengers. Load factor was 82 percent, compared to 81 percent in the preceding year.

Revenue per passenger declined 6 percent from a year earlier.

Excluding fuel, sector length adjusted unit costs dropped 9 percent. Ancillary revenues climbed 13 percent, helped by strong customer uptake of reserved seating, priority boarding, and higher credit card fees, the company said.

Total operating expenses climbed 6 percent to 987.4 million, due to the 10 percent rise in fuel costs and increased costs associated with growth of the airline.

Looking ahead, the company expects fourth-quarter yields to decline by about 8 percent, slightly better than the 10 percent decline previously guided. The firm aims that its cost control measures will deliver a 4 percent fall in unit costs, ex-fuel in the quarter.

The company said it remains confident to deliver full-year net profit out-turn to be in the range of 500 million euros to 520 million euros as projected earlier. The company expects its fiscal 2014 traffic to rise to 81.5 million passengers, slightly higher than previously guided.

RYA.L is currently trading at 6.61 euros, up 0.30 euros or 4.83 percent, on a volume of 1.58 million shares.