Ryanair swings to profit in Q3 but 737 MAX delays derail 200-million passenger target
Ryanair saw revenues jump in Q3 but delays to 737 MAX deliveries slow passenger growth
Budget airline Ryanair swung to a profit in its fiscal third quarter, thanks to strong Christmas and New Year bookings, but said delays to deliveries of Boeing MAX aircraft would mean it will miss its 200-million passenger target.
Europe’s largest low-cost airline reported net profit of €88 million ( $97 million, £74m) in the three months to December 31, up from a €66-million loss in the same period in 2018. Per-passenger revenue rose by 13 per cent, while overall revenue rose 21 per cent year-on-year to €1.91 billion.
The 737 MAX hasn't flown since March 2019, following two fatal air crashes in October 2018 and March 2019, which killed a total of 346 people. Ryanair had been due to take delivery of 58 planes, but these numbers have been reduced to just 20, with the first deliveries now only expected in September or October this year, rather than March or April, as the company originally expected.
“We believe that these “gamechanger” aircraft (with 4 per cent more seats, burn 16 per cent less fuel), when delivered, will transform our cost base and our business for the next decade” Ryanair said in a statement.
“Due to these delivery delays, we won’t see any of these cost savings until late FY21. As a direct result of these delivery delays, we plan to extend our 200-million per-annum passenger target by at least one or two years to FY25 or FY26,” it said.
Ryanair’s full-year fuel bill will rise by €440-million, as a result of stronger crude oil prices. The company said it had hedged 90 per cent of its fuel needs for fiscal 2020 at an average price of $71 a barrel, and 90 per cent of its fiscal 2021 needs at $61 a barrel.
The delays to the 737 MAX meant the board had also decided to extend Ryanair’s €700-million share buy-back programme to the end of July, the company said.
The company said on January 10 it had cut its passenger traffic forecast for the fiscal year to March 31 2021 to 156 million from 157 million previously. It raised its profit forecasts for the full year to €950 million-1.05 billion, from a previous estimate of €800-900 million.
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