Ryanair, the world’s biggest international scheduled airline and Europe’s largest overall carrier has reported a 55% increase in Q1 profits to €397m ($463m) after passenger traffic rose by 12% to 35m on total revenue up +13% to €1.687m ($1.967m).

 

Putting the results into context, Ryanair CEO Michael O’Leary said: “We are pleased to report this 55% increase in PAT to €397m, but caution that the outcome is distorted by the absence of Easter in the prior year Q1.

 

“While Q1 average fares rose by 1% to just over €40, this was due to a strong April (boosted by Easter) offset by adverse sterling, lower bag revenue as more customers switch to our two free carry-on bag policy and yield stimulation following a series of security events in Manchester and London.”

 

HEALTHY FINANCIAL POSITION

O’Leary said that besides the aforementioned items, the trading period’s highlights also included average fares +1% to €40.30 ($46.96) and unit costs down 6% (excluding fuel -3%), plus ten additional B737-MAX-200 aircraft and more than €200m ($233m) returned to Ryanair’s shareholders in the form of share buybacks.

 

He added that the airline took delivery of 14 new B737’s in Q1, ahead of the peak summer period, while both of its new bases in Frankfurt Main (opened in March) and Naples (April) continue to perform well with strong advance bookings. He added that the Frankfurt Main base will increase from two to seven aircraft in September.

 

O’Leary added: “We will launch two new bases in Memmingen (Munich) and Poznan in the autumn and open 170 new routes for winter ’17. We continue to see significant growth opportunities for Ryanair across Europe as competitors close bases or move capacity and legacy airlines restructure.”

 

He also pointed to the launch of new flight connections in May at Rome Fiumicino and subsequently to Milan Bergamo in July, while the airline also began selling Air Europa long-haul flights from Madrid on its website.

 

PAX UP 12% – AS FUEL BILL FALLS…

Tellingly, O’Leary also highlighted the continuing costs gap between Ryanair and its competitors, which he claims continues to widen. He said: “We delivered a 6% unit cost reduction in Q1 as our fuel bill fell despite a 12% increase in traffic.

 

“Ex-fuel unit costs, helped by weaker sterling (which will, we believe, be reversed in H2 due to more difficult y-o-y comparisons), fell by 3%, as we delivered unit cost reductions across nearly all cost lines. We remain on-track to deliver our previously guided ex-fuel unit cost reduction of 1% in FY18.”

 

He also emphasised that Ryanair’s balance sheet continues to be one of the strongest in the industry and despite a cumulative spend of more than €200m ($233m) on buy backs and capex of almost €400m ($466m) in Q1, the carrier reduced its net debt by €150m ($175m) from €244m ($284m) at March 31 to €94m ($109m) as of June 30 earlier this year.