DUBLIN (AP) — Budget airline Ryanair announced an unexpected third-quarter net loss of euro10.3 million ($14 million) Monday and blamed snow-covered runways and air-traffic controller strikes for lost business.
Ryanair chief executive Michael O’Leary said the airline suffered more than 3,000 flight cancelations during the October-December quarter, more than double the number experienced in all of 2009. He called the third-quarter losses “disappointing, as we were on track to break even.”
However, O’Leary said Ryanair’s outlook would remain stable for a full-year profit in a range of euro380 million to euro400 million ($517 million to $545 million). He noted that the airline has already hedged most of its fuel supply and U.S. dollar needs at advantageous rates through 2012.
Ryanair shares rose 1.7 percent to euro3.68 in midmorning trade on the Irish Stock Exchange. Analysts said Ryanair continued to be the European airline most likely to keep growing regardless of wider economic trends.
Investec Asset Management in London said Monday’s figures offer “confidence that despite the dire consumer backdrop, low-cost carriers can continue to grow, driven by share shift as passengers trade down to low fares.”
Ryanair offered no details on its lost business from flight cancelations attributed to strikes and December’s snow chaos across Europe. Chief financial officer Howard Millar said only “a small percentage” was caused by air traffic controllers’ unofficial strikes in several European countries.
Revenues grew 22 percent to euro746.3 million ($1.02 billion), partly because average ticket prices rose 15 percent. Passenger numbers rose 6 percent to 17 million.
Millar said the average one-way fare — excluding Ryanair’s panoply of added charges — was euro34 ($46). He said fares were rising chiefly because Ryanair is increasing longer routes to Eastern Europe, the Meditteranean and the Canary Islands that incur higher fuel costs.
Ryanair also recorded a euro10.9 million loss in the third quarter of 2009. Typically the airline makes all or most of its profits during the heavier-traffic tourist periods in spring and summer.
O’Leary denounced European laws that leave airlines, rather than the airports, financially responsible for paying the bills of stranded passengers when runways are closed by bad weather or strikes.
“It is inequitable that airports enjoy a boost to their restaurant and retail revenues from stranded passengers when their runways close, yet the airlines are obliged to pay for meals, drinks and hotels, when these cancellations are outside of our control,” O’Leary said.
Ryanair said its work force in the quarter grew 14 percent to 8,121, while its fuel costs rose 37 percent versus 2009 to euro283.7 million ($386.4 million) because of higher oil prices and longer average routes.
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Online:
Ryanair earnings statement, http://bit.ly/ifgw40