Update on 2nd Quarter
Ryanair Holdings PLC
27 October 2000
Ryanair Issues Second Quarter Performance Update
Ryanair, Europe's Largest Low Fares Airline today (Friday 27th October)
indicated that its trading performance for the second quarter (and half year)
ended 30th September 2000 is expected to be somewhat stronger than the general
range of market expectations. In a briefing to analysts at 14.00 hours today
Ryanair explained that the trading performance in the second quarter had been
stronger than anticipated. The factors giving rise to this include:
- Passenger volumes and revenues are higher than expected due to the strong
performance of the ten new routes, the continued strength of Sterling to
the Euro, whilst the lower cost of distribution over the internet enabled
Ryanair to offer even more lower fares, which has in turn stimulated
passenger volumes.
- The success of Ryanair.com has driven the percentage of direct bookings
from 40% to 90% in just six months, and has resulted in higher than
expected savings in travel agents commissions and computerised reservation
system charges.
- The successful introduction of a further five 737-800 aircraft (10 in total
in service), which have 45% more seats and better operating efficiencies
than our existing 737-200 fleet, combined with higher than targeted load
factors have enabled us to further reduce our operating costs on a per seat
basis.
Speaking to analysts today Ryanair's Chief Executive, Michael O'Leary said
'The success of Ryanair.com, and in particular our ability to guarantee the
lowest air fares on the internet in Europe, has meant that our traffic growth
in the second quarter has run at 34% instead of our anticipated 27%. Our ten
new routes have performed ahead of expectations and these too have been
assisted by the success of Ryanair.com.
As a result we now believe that the consensus range of analysts forecasts
which are predicting 35% growth in after tax profits for the second quarter
should be revised upwards. Whilst the results for Quarter 2 are still being
finalised, based on preliminary results we now feel that analysts estimates of
Profit after Tax growth should be in the mid to high 40% range for Quarter 2,
and the mid to high 30% range for the half year.
We would caution investors not to get too carried away about this upgrade.
Our new routes are progressing well, Ryanair's low fares formula remains
unmatched by any airline in Europe and in difficult market conditions we
continue to deliver increased traffic growth and profitability. Nevertheless,
our view is that Sterling remains artificially strong against the Euro, and
that our fuel costs (whilst we are extensively hedged) will rise somewhat into
the future. The results for quarter two will be stronger than expected
average rate of 25% per annum and investors should continue to focus on this
figure for future growth, rather than on what has been a particularly strong
second quarter.'
Final second quarter numbers will be released to the markets on Tuesday 07th
November 2000.
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