Ryanair has raised its profit forecast, saying higher ticket prices were more than making up for expensive fuel and reduced capacity, underlining the resilience of its low-cost sector as legacy carriers struggle.
The Irish low cost carrier, Europe's largest, increased its full year profit forecast by nine per cent to £480m euros (£403m) after posting revenue growth of 13 per cent in the three months to 31 December.
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"The EU recession, higher oil prices, the unfolding failure of the package tour operator model, significant competitor fare increases and capacity cuts, has created enormous growth opportunities for Ryanair," Chief Executive Michael O'Leary said in a statement.
It reported a net profit of 15 million euros, well ahead of a 16 million loss forecast in a poll of 21 analysts compiled by the company, after it grounded 80 of its 270 planes over the winter due to high fuel costs.
Revenue was 844m euros in the quarter, ahead of an average analyst forecast of 819m. Average fares rose 17 per cent in the quarter from a year earlier, making up for a two per cent fall in passenger numbers.
A forecast 350m euro increase in the fuel bill next year "poses a significant cost challenge," O'Leary said.
The Irish carrier follows low-cost rival EasyJet in posting strong revenue growth as higher-priced rivals are battered by fuel costs and a struggling global economy.
City A.M. Reporter