Ryanair Lifts FY Net Profit Guidance By 25% Amid Strong Summer Traffic, Prices

(RTTNews) - Irish airline Ryanair (RYA.L, RYAAY) Wednesday raised its full year net profit guidance by 25 percent from a current range of 940 million euros to 970 million euros to a new range of 1.175 billion euros to 1.225 billion euros.

The company attributed the boost to stronger than expected peak summer traffic and prices as its "Always Getting Better" customer experience program continues to win new customers at slightly higher than expected air fares.

The main drivers for this improved guidance are first-half traffic growth of 13 percent, which was previously guided to be 10 percent, and fares up over 2 percent, which were earlier expected to be flat.

Third-quarter traffic growth is now expected to be 15 percent, compare to the prior projection of 13 percent. Fares for the quarter are now expected to be flat, in comparison with the previous guidance of -4 to -8 percent.

Full-year 2016 traffic is increased to 104 million, compared to the previous expectation of 103 million.

Ryanair cautioned that its full year result remains heavily dependent on close-in bookings in the third and fourth quarters.

Ryanair also confirmed that it has successfully recovered all funds that were the subject of a fraudulent electronic transfer to a Chinese bank in April.

According to the company, it had originally planned to update shareholders on current trading at its AGM on September 24, but the strength of its July and August numbers is continuing into September and the scale of the upgrade requires this update to be brought forward.

Ryanair's Michael O'Leary said, "We would caution that not all of this improvement is due to either our model or our management. As a "load factor active/yield passive" airline we have clearly benefited from favourable industry trends this summer including bad weather in Northern Europe, stronger sterling encouraging more UK families to holiday in the Med, reasonably flat capacity across the EU industry and lower prices for our unhedged oil."

The company does not expect that these favorable conditions will persist, and O'Leary urged shareholders and analysts to avoid irrational exuberance while the firm continues to execute its ambitious growth plans.