Ryanair ancillaries per pax grow 14% in first quarter; MAX deliveries delayed

Brexit and intense competition squeezed Ryanair in the three months to June

Brexit and intense competition squeezed Ryanair in the three months to June

Europe's largest low-priced carrier reported post-tax profit down 21 per cent year on year at 243 million euros ($270.36 million) in the three months to June 30, slightly ahead of expectations in a company-supplied analysts' poll.

Ancillary sales, driven by strong priority boarding and preferred seats sales, grew 27% to €800m.

Ryanair also saw an 11 per cent increase in passenger numbers, carrying 42 million guests in the first three months.

Speaking as the budget airline's first-quarter profits slumped by 24%, O'Leary bemoaned the impact of delays in the return to service of the 737 Max, a key component of Ryanair's strategy to arrest the recent decline in its financial performance.

"The current weak fare environment has continued into quarter two and we expect H1 [half year] fares to be down approximately 6pc", he added.

Chief executive Michael O'Leary said: "The two weakest markets were Germany, where Lufthansa was allowed to buy Air Berlin and is selling this excess capacity at below cost prices, and the United Kingdom where Brexit concerns weigh negatively on consumer confidence and spending".

Excluding fuel, unit costs rose 4% due to charges related to taking full control of Austrian subsidiary Laudamotion, handing back leases to Lufthansa, and a 21% increase in staff costs.

Ryanair is one of Boeing's biggest customers and was due to have 58 737 MAX jets in time for its 2020 summer season.

Laudamotion has replaced the leases with 20 lower cost A320 operating leases, which Ryanair expects to lower losses in the second year of operation despite lower fares and fierce rivalry in Germany and Austria.

Apart from this, the delay in the delivery of the Boeing 737 MAX has also led to drop in share value.

Average fares for the year to end-March 2020 will be towards the lower end of Ryanair's guidance range of +1% to -2%, Ryanair said.

"This guidance remains heavily dependent on close-in Q2 fares, H2 prices, the absence of security events, and no negative Brexit developments in H2".

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