Fuel costs drive Ryanair profits down

Ryanair profits fell 29 per cent in the three months to the end of June to €99 million due to higher fuel costs.

The no-frills airline said a 27 per cent rise in oil prices knocked €40 million off its quarterly profit.

Revenues for its first were up 11 per cent to €1.28 billion while passenger numbers rose 6 per cent from 21.3 million a year earlier to 22.5 million.

Operating unit costs rose 10 per cent to €544 million due to the higher fuel costs.

Average fare costs increased by 4 per cent while ancillary sales grew by 15 per cent to €286 million, equivalent to 22 per cent of total revenues.

The airline was hedged at $820 pt in the first quarter of last year compared to $1,000 per tonne this year, a price increase of 22 per cent. As a result of this Ryanair said fuel costs should lower in subsequent quarters as the pricing difference narrows.

Ryanair chief executive Michael O'Leary said the airline was 90 per cent hedged for this fiscal year at $1,000 per tonne and it had recently hedged 50 per cent of the first six months of 2014 at $940 per tonne.

Mr O'Leary said the airline's outlook remains cautious for the year with traffic expected to grow 4 per cent.

"We expect positive yields will continue in the second quarter and anticipate smaller fuel cost increases. Currently, we have no visibility of next winter’s yields but expect that continuing austerity, EU recession, and lower yields at new bases will to restrain fare growth," he said.

"Until we get some second-half yield visibility our guidance for full-year 2013 remains unchanged, in the range of €400million to €440 million as previously guided," he added.