Una McCaffrey
New passenger figures from Ryanair suggest the airline will comfortably meet its own growth targets for the full year to the end of March.
The airline said it had achieved an average load factor - a measure of the number of passengers carried as a proportion of available seats - of 82 per cent for the year to December 31st.
This performance, which came as December's load factor dipped to 83 per cent from 85 per cent in the same month of 2002, should see Ryanair meet its full-year load factor forecast of 80 per cent.
Mr Joe Gill, analyst with Goodbody Stockbrokers, calculated that load factor could drop to 75 per cent in the fourth quarter without Ryanair missing its target. Mr Gill said this would give Ryanair "huge flexibility" as it beds down new routes and hubs over the next few months.
He pointed out that the airline should also be benefiting at the moment from the dollar's persistent weakness against the euro, which he believes will be "handing fistfuls of cash savings" to the company.
The analyst said that while Ryanair hedges its dollar-denominated fuel costs out by up to 12 months, it tends to hedge its euro/dollar cross much shorter. This should mean, he believes, that the company is already drawing benefits from the dollar's severe decline while having no negative currency exposure.
Mr Gill suggested that Ryanair would also make lagged gains on its US aircraft purchase costs, which are depreciated through its balance sheet over 20 years.
He said Ryanair's insurance and maintenance charges, which are also denominated in dollars, should be lower as a result of the dollar's falls.
Ryanair's shares rose in line with the European airline sector yesterday, closing up 13 cents on the day at €6.72. Mr Gill predicted that the stock would remain on its current low rating until a Charleroi judgement emerges from the European Commission.
An industry source told Reuters yesterday that a decision could be taken "some time in the first quarter". A spokesman for EU Transport Commissioner Ms Loyola De Palacio said the Commission was still working on the case. - (Additional reporting, Reuters)
