Irish no-frills airline Ryanair is benefiting from falling fuel costs
Dublin - AFP
Irish no-frills airline Ryanair on Monday raised its annual earnings forecast as it swung into a quarterly profit thanks to falling fuel costs and higher passenger growth.
The airline posted net profit of 49 million euros ($55 million) in the three months to the end of December compared with a loss of 35 million euros during the equivalent period in 2013, the Dublin-based company said in a results statement.
Ryanair lifted its profit guidance for 2014/15 to between 840 and 850 million euros from a previous forecast of up to 830 million euros. It is the fifth time that the airline has raised its profits forecast for the current financial year that runs to the end of March.
It said that fuel costs dropped by 2.0 percent, with jet fuel prices declining as a result of tumbling crude, from where it is sourced.
"As lower oil prices kick in over the next two years, Ryanair intends to pass on much, if not all, of these savings to our rapidly growing customer base in the form of lower fares," the company said.
The airline cautioned that its profit growth expectations were "modest" for next year as its expects rivals to cut fares because of cheaper oil prices.
"It is important that analysts are mindful of this likely increased price competition when revising their forecasts," chief executive Michael O'Leary said in the statement.
The airline meanwhile said it had yet to receive a formal offer for its stake in Aer Lingus, which last week backed a 1.35-billion-euro takeover bid from British Airways-parent IAG.
Ryanair is the largest share holder in Aer Lingus and has itself made three failed attempts to take over its Irish rival.
Ryanair on Monday added that its passenger numbers grew by 14.0 percent to 20.8 million in the third quarter, with revenues up 17 percent to 1.13 billion euros.
It confirmed a plan to return 520 million euros to shareholders via payment of a special dividend, adding that it would buy back shares at a cost of 400 million euros.