Early Easter drives up profits at Ryanair

Early Easter drives up profits at Ryanair

Early Easter drives up profits at Ryanair

Commenting on the results, Michael O'Leary, CEO of Ryanair, said that he was pleased with the increase in profits however he cautioned that the outcome is distorted by the absence of Easter in the prior year.

Ryanair warned rivals on Monday that it may cut its fares in late summer by as much as 9 percent from past year, triggering a share sell-off by investors concerned about the impact on profitability.

Ryanair beat analyst expectations with profit of 397 million euros for the three months to the end of June, compared to a company poll average of 366 million euros, after the timing of Easter helped lift fares by 1 percent on an annual basis.

But management made clear that the increase was just a blip and that prices would fall sharply in the coming months.

"It's a competitive market out there. You're looking at fares down anywhere between 7, 8, maybe as much as 9 percent", in the three months to September 30, Chief Financial Officer Neil Sorahan told Reuters.

Ryanair, Europe's largest airline by passenger numbers, said average ticket prices were up 1%, aided by strong bookings during the Easter-vacation period, which previous year didn't fall in the first quarter. Some analysts had forecast it would scale back fare cuts.

"There are a few guys out there who look like they are starting to find life hard", Sorahan said.

Low-priced rivals easyJet and Wizz Air have both in recent weeks warned that average fare levels would continue to be under pressure over the key summer period.

Ryanair's cost base is widely acknowledged as the lowest of Europe's major carriers as low plane purchase, maintenance and staff costs have allowed it to undercut rivals while still making a profit.

It said some of the falls were due to declines in the value of sterling and may not be repeated.

The airline reported a profit after tax of €397m for the second quarter, which was comfortably ahead of the consensus forecast from analysts of €366m.

Fiscal 2018 earnings will be in the region of €1.4bn to €1.45bn, in line with a previous forecast and up from €1.32bn euros a year earlier, Ryanair said.

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