Ryanair: overall expansion plans

Der Geschaeftsfuehrer der irischen Billigfluggesellschaft Ryanair, Michael O'Leary, posiert am Mittwoch (09.05.12) auf dem Flughafen Frankfurt-Hahn in Lautzenhausen auf einer Pressekonferenz der Fluggesellschaft mit einem Flugzeugmodell. Die Billigfluglinie Ryanair kritisiert die EU-Beihilfeverfahren gegen regionale Flughaefen in Deutschland als "Feldzug". Der Vorwurf illegaler oeffentlicher Finanzhilfen fuer die Airport-Betreiber, von denen Ryanair profitiere, sei falsch, sagte Ryanair-Chef Michael O'Leary am Mittwoch in Lautzenhausen. (zu dapd-Text) Foto: Harald Tittel/dapd
Ryanair CEO Michael O’Leary/Image Harald Tittel

The Ryanair Holdings PLC on November 7th lifted its outlook for long-term passenger growth and nonticket sales. Ryanair said it now expects to carry 200 million passengers a year by March 2024, or 20 million more than previously projected.

The airline expects to gain customers through expansion and retrenchment of other airlines in the face of stiff competition. Sales for the July-to-September period, traditionally the busiest for the airline, advanced 2% to €2.4 billion.  The Irish carrier said its board had approved a €550 million share-repurchase program, the airline’s eighth, to be carried out through February 2017.

Last month, Ryanair said the fall in value of the British pound in the wake of the country’s vote to leave the EU would slow profit growth this year. More than a quarter of the carrier’s sales are in the U.K. Second quarter net profit rose 2% to €912 million ($1 billion) from €843.1 million a year earlier. Net profit is now expected to be in the range of €1.3 billion to €1.35 billion in the year ending March, adjusted down from €1.375 billion to €1.425 billion. Profit last year was €1.2 billion.

Europe’s largest airline by passenger numbers, which lobbied against Britain leaving the EU, said “uncertainty over Brexit, and the final outcome of the U.KVs departure negotiations with the EU, will continue to overhang our business” into next year. The British currency will be weaker and growth in the U.K. and Europe will slow, it said.

Capacity goes to Italy, Germany and Belgium

Ryanair cut its U.K. growth forecast to 5% from 12% this year. Chief Executive Michael O’Leary said the capacity would instead go to Italy, Germany and Belgium, in part to take advantage of cuts made by other carriers. Ryanair said it now expects to carry 200 million passengers a year by March 2024, or 20 million more than previously projected by that time. The airline estimates it will carry more than 119 million passengers this year.

Ryanair also moved to hedge its exposure to the pound after Brexit in a bid to give it certainty over costs, Chief Financial Officer Neil Sorahan said. Ryanair has about 26% of sales in the British currency, with 18% of costs in pounds. European airlines have been battling myriad headwinds beyond the fall of the British currency. Mr. O’Leary said the airline had raised its target for ancillary revenue for items such as early boarding or assigned seating and now expects 30% of revenue by March 2020 to come from such sales, up from 20%.

The airline hasn’t slowed overall expansion plans, though. Last week, it said it would open a base at Frankfurt Airport, intensifying pressure on rival Deutsche Lufthansa AG.

Ryanair.com has overtaken southwest.com to become the “world’s largest airline website.”

Ryanair has styled itself as “the world’s favorite airline” with “Europe’s lowest fares,” found a new reason to brag in Monday’s half-year results: Ryanair.com has overtaken southwest.com to become the “world’s largest airline website.”

Unlike popularity, website traffic is at least quantifiable. The company’s latest boast is based on September traffic. Ryanair’s site attracted roughly 46 million visits, compared with some 40 million for Southwest Airlines’ and 30 million for American Airlines’ aa.com, the No. 3 site. Ryanair’s claim to world-beating popularity is partly a swipe at British Airways, which in 1983 launched a marketing campaign calling itself “the world’s favorite airline.” The Irish carrier’s boast is publicly justified with reference to data on international, as opposed to domestic, passenger numbers.

According to the opinion of The Wall Street Journal Europe, Ryanair really could brag: It has been the most lucrative of all major quoted airlines for most of recent history, though Southwest is now fractionally ahead, according to FactSet.

Source: The Wall street Journal Europe

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