Dublin: Europe’s biggest low-cost airline Ryanair reported a 17% increase in first half net profit on Monday and upgraded its full-year earnings guidance, as expected, on the back of better winter yields.
The Irish airline, famous for its zealous suppression of costs, now expects full-year net earnings to be in a range of €380 million to €400 million ($527.4 million to $555.2 million) compared with previous guidance of €350 million to €375 million.
The rosier outlook comes on the heels of raised earnings expectations across the sector with leading flag carriers Lufthansa and Air France-KLM last week citing improving revenues and robust bookings.
Ryanair has exploited the recession to expand at the expense of higher-cost rivals in Europe and the group said consumers would continue to trade down.
“We continue to gain market share across Europe,” chief executive Michael O’Leary said in a statement. “We expect this trend to continue.”
Ryanair said net profit for the six months to the end of September was €452 million on the back of a 23% increase in revenues. The average forecast of six analysts polled by Reuters was for net profit of 441 million euros.
The airline cut its estimate of the costs of refunding tickets on flights cancelled as a result of the Icelandic volcano to €32 million from 50 million.
Most of Ryanair’s growth comes from the continent and it is reducing capacity in recession-weary Ireland, blaming a tourist tax introduced last year as part of government austerity measures.
“We have again cut our Dublin winter capacity by 15% and have switched more aircraft to other European countries which have scrapped tourist taxes and cut airport charges,” O’Leary said.