DUBLIN, July 29: Cutbacks by rivals and extra charges for choosing seats helped low-cost airline Ryanair meet forecasts with profit of 78 million euros ($103 million) in the three months to June, the Irish airline said on Monday.
Carriers like Ryanair have been quick to exploit gaps in the market left by higher-cost rivals like British Airways, owned by IAG, and Air France-KLM cutting short-haul routes due to fuel costs and weak consumer confidence.
That helped push shares in Europe’s biggest budget airline to an all-time high in June. British budget rival easyjet’s stock also hit its highest ever last week after it reported a bumper spring season.
Ryanair benefited in its first quarter from an increase in so-called ‘ancillary’ charges, particularly the roll-out of advance booking for specific seats across the network, allowing passengers to bypass an unruly rush at departure gates.
‘We’ve been pleasantly surprised with the uptake – passengers want reserved seats,’ Chief Financial Officer Howard Millar told Reuters.
Net profit compared with a forecast of 78 million euros in a poll of over 20 analysts by the company and was 21 percent lower than a year ago.
The Dublin-based airline, famous for its no-frills service, maintained its forecast for earnings of 570-600 million euros in its full year to end-March 2014, versus last year’s record of 569 million euros.
The airline, however, said its average fares fell 4 percent due to the timing of Easter and impact of air traffic control strikes in France, while non-ticket income from extras such as baggage and reserved seating rose 25 percent. (AGENCIES)
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