Ryanair Reports Third Quarter Net Profit of €88M; Announces New London Southend Service
Ryanair reported a net profit of €88M or basic earnings per share of €0.08 for the third quarter on the back of increased Christmas and New Year holiday demand. For Q3 last year the company posted a loss of €66M or an EPS loss of €0.06.
Despite a restriction on capacity growth related to the continued Boeing 737 MAX grounding, Ryanair delivered a healthy third quarter net profit of €88M or basic earnings per share (EPS) of €0.08. This compares to a loss of (€66M) or (€0.06) during Q3 last year. Quarterly revenue increased 21 percent to €1.91B, versus €1.58B for Q3 2018. During the quarter, traffic at the low-cost carrier (LCC) grew six percent to 36M guests, revenue per guest increased 13 percent and ancillary revenues were up 21 percent. Additionally, Ryanair returned over €440M to shareholders under the company’s €700M share buyback program.
Fuel costs in the third quarter rose 14% year-over-year to €0.7B on higher prices and 6% traffic growth while unit costs excluding fuel (CASK-ex) increased one percent on increased pilot pay and higher crew ratios. Ryanair has hedged 90% of FY20 fuel at $71/barrel and FY21 fuel at $61/barrel which will deliver €100M fuel cost savings in FY21.
Ryanair Group airlines continue to grow with Buzz increasing their fleet to 32 Boeing 737s in Q3 and expanding outside of Poland with new Prague and Budapest bases. During 2020, Buzz will increase their fleet to 50 B737s with seven aircraft in Polish charter operations and 43 operating in scheduled service for Ryanair. Lauda continues to underperform due to lower than expected fares amid intense competition from Lufthansa subsidiaries in Germany and Austria, but airline management is implementing cost cutting measures. Lauda’s fleet will grow from 23 to 38 Airbus A320s this year which will provide increased capacity in Vienna and a new base in Zadar, Croatia. Malta Air, which has taken over the Ryanair Group’s bases in France, Germany, Italy and Malta, continues to grow rapidly and will increase their fleet to 120 aircraft in 2020. Ryanair DAC reduced their fleet to 360 Boeing 737s during Q3 as Buzz and Air Malta increased flight operations for the Group.
The Ryanair Group operates a young and fuel-efficient fleet, 70% of which are debt-free. The Group ended the period with a net debt level just over €700M. As a result of the continued Boeing 737 MAX grounding, Ryanair had to close some loss-making winter bases, but the company is minimizing job losses through base transfers and is working closely with team members, unions and airports to complete the process.
In a separate announcement Monday, Ryanair announced the launch of new service from London Southend to Rodez, France. Starting in July, the flight will operate twice weekly as part of the carrier’s summer 2020 London Southend schedule. Customers can book flights on the route starting today as far out as October 2020. In Monday’s announcement, Ryanair’s Eimear Ryan said in part,
“Ryanair is pleased to launch a new London Southend route to Rodez in France, commencing in July, which will operate twice weekly as part of our London Southend Summer 2020 schedule. Customers in London Southend can now book flights to Rodez as far out as October 2020.”
Ryanair Holdings, plc is Europe’s largest airline conglomerate and the parent company of Buzz, Lauda, Malta Air, and Ryanair DAC. The airline carries over 154M passengers annually with over 2,400 daily departures from 82 bases. Ryanair serves over 200 destinations in 40 countries with a fleet of over 475 Boeing 737 Family aircraft. Currently, the low-cost carrier has an additional 321 Boeing 737s on order. The Ryanair Group expects annual traffic to reach 200M customers by FY 2024. The carrier employs 19,000 and has maintained a stellar safety record for over 34 years and prides itself on being “Europe’s greenest cleanest airline group” promising customers a reduction in CO2 emissions of up to 50%, versus the “Big 4 EU major airlines.”