Ryanair ups annual profit forecast

BUDGET airline Ryanair increased its profit forecast for the year after posting a smaller than expected third-quarter loss yesterday.

Europe’s biggest low-cost airline said a drop in fuel prices had helped to improve the company's figures.

Ryanair's loss of €10.9m (£9.5m) in the three months to the end of December compared with a €118.8m net loss a year earlier.

Chief executive Michael O’Leary said: “We have now increased our full-year net profit guidance to €275m from the lower end of the range of €200m to €300m previously guided.”

Revenue increased by one percent in the third quarter to €612m and fares fell less than expected, allowing it to forecast that the fall in full-year yields – a measure of average fare levels – would be closer to 15 per cent than the 20 per cent it forecasted earlier.

The Ireland-based airline claimed it would continue to pick up market share from rivals, and expected to do especially well in Italy, Scandinavia, Spain and the UK.

Ryanair said a 37 per cent fall in fuel costs had boosted the figures.

However the carrier has warned that its increasing financial stability will not prevent price hikes on flights to and from Ireland.

The company blames the Irish government for imposing a €10 levy on flights from Ireland.

Ryanair spokesman Stephen McNamara said: “Airlines like Ryanair and Aer Lingus have been absorbing the €10 tax on flights from Ireland but it is not sustainable so we will at some point have to pass it on to customers. We think increased prices will come in late this year or early 2011.”

Meanwhile, chief operating officer Michael Cawley said many of Ryanair’s flights could move from Stansted to‚ÄąGatwick if the Sussex airport’s new owner, Global Infrastructure Partners, lives up to its pledge to improve its services and keep charges down.

“Certainly we are up for talking with [Gatwick],” Cawley said.