Ryanair shares climbed 6 per cent on Tuesday after the airline reported an 11 per cent rise in net profit to €1.3 billion in the six months to September 30th.
The airline, hit by controversy over flight cancellations in September, said sales were 7 per cent higher at €4.4 billion during the period, which is the first half of Ryanair’s financial year, from €4.1 billion over the same period last year.
Ryanair's shares rose 6.03 per cent to €16.70 at lunchtime on the Irish Stock Exchange following the news.
The airline flew 72.1 million passengers in the six months, 11 per cent more than the 64.8 million who travelled with it in the same period last year. Ryanair attributed the growth in passengers to a strong performance at Easter and a 5 per cent reduction in air fares.
The company confirmed that the cost of cancelling flights up to March next year, which will affect about 700,000 customers, will come to €25 million.
Problems with rostering pilots forced the carrier to cancel flights and then slow the rate at which it planned to grow through the winter.
Chief executive Michael O’Leary said it had rebooked the overwhelming majority of affected passengers on alternative flights or compensated them. The airline also issued every customer affected with travel vouchers worth €40 one-way or €80 return.
Mr O’Leary said the cost of proposed pay increases for pilots, and for recruiting and training new ones, will come to €45 million.
The chief executive said Ryanair saw no reason to change its estimate that profits for the 12 months to March 31st next will be €1.4 billion-€1.45 billion.
However, he cautioned that this depended heavily on close-in bookings for the second half of the year, and the absence of any security threats, air-traffic control strikes or negative developments relating to the UK’s planned exit from the EU.
Share buy-back
“These strong first-half results reinforce the robust nature of Ryanair’s low-fare, pan-European growth model even during a period which suffered material failure in our pilot rostering function in early September,” Mr O’Leary said.
Ryanair is not planning to buy back any more shares in the near term as it seeks to keep its year-end net debt and cash flat. The company returned €639 million to investors during its first half through a share buy-back programme.
That spending, along with €675 million capital investment and €200 million debt repayments, left it with €600 million in net debt on September 30th.
Earnings per share rose 16 per cent to €1.07 from 92 cent. According to Mr O’Leary, ancillary revenues, earned from extras over and above what passengers pay for fares, rose 14 per cent.
Including fuel, first-half costs were flat, but fell 5 per cent excluding that expense.
Mr O’Leary said costs would have fallen 2 per cent had the airline not had to pay €25 million to passengers affected by its cancellations.
That payment and the €45 million that it is proposing to spend on pilots means that costs, excluding fuel, will rise 3 per cent over the 12 months to the end of next March.
Including fuel, Ryanair expects costs to fall 2 per cent over the course of the current financial year.
