Ryanair Boeing 737-8AS EI-CSA (msn 29916) (Scotland) STN (Antony J. Best), originally uploaded by Airliners Gallery.

Ryanair (Dublin) reported a net profit of $19.8 million in the fiscal third quarter.

The ultra low-cost carrier issued the following statement:

“Ryanair, the world’s favorite airline, on January 30 announced a Q3 profit of €15m compared to a Q3 loss of €10m last year. Revenues increased 13% to €844m as traffic fell 2% and average fares rose 17%. Unit costs rose 11% due to a 7% increase in sector lengths and an 18% increase in fuel costs. Excluding fuel, sector length adjusted unit costs declined by 1%.”

The flamboyant airline continued:

“Our new routes and bases have performed well this winter. We open 5 new bases in Baden Baden (Ger), Billund (Den), Palma (Spain), Paphos (Cyprus) and Wroclaw (Poland) in March/April 2012. We expect to launch at least 1 more base for summer 2012, shortly. The EU recession, higher oil prices, the unfolding failure of the package tour operator model, significant competitor fare increases and capacity cuts, has created enormous growth opportunities for Ryanair, as large and smaller airports across Europe compete aggressively to win Ryanair’s growth.

Unit costs rose 11% mainly due to an 18% increase in fuel costs. Excluding fuel, sector length adjusted unit costs fell 1%, as we aggressively controlled costs despite a 2% basic pay increase, higher Eurocontrol fees, and substantially higher Dublin Airport charges. In FY13 we are 90% hedged for H1 at $990 per ton (approx. $99 per barrel), and 70% hedged for H2 at approx. $100 pbl. We expect to hedge the balance of our H2 2013 needs over the coming months. However, at these prices our fuel bill for FY 2013 will rise by approx. €350m which poses a significant cost challenge for next year.

The BAA’s recent announcement that it will pay dividends of £240m this year to Ferrovial and its other shareholders is further evidence that it is generating monopoly profits under the CAA’s “inadequate” regulatory regime. Over the past five years while Stansted charges have doubled, traffic has declined 26% from over 24m in 2007 to just 18m in 2011. The BAA monopoly’s shareholders are being unfairly enriched at the expense of Stansted airport users who continue to suffer high charges and inadequate service. We again call on the UK government and the CAA to bring forward the sale of Stansted to enable competition between London airports to deliver lower airport charges and improved customer service where the BAA airport monopoly and CAA’s “inadequate” regulatory regime has repeatedly failed.

We also call on the UK government to scrap its APD tourist tax which is damaging UK tourism and jobs. A similar visitor tax in Holland was scrapped after just one year when it was proven that its detrimental impact on Dutch tourism was far greater than the revenue it generated. UK APD was doubled in 2007 to £10 and was increased again to £12 this year and has resulted in the UK having the highest aviation taxes in the world, to the detriment of the UK’s tourism industry, which was one of the UK’s most important revenue earners before its visitor numbers declined over the past four year.

In Ireland the Government owned DAA airport monopoly recently published its 2011 traffic figures which highlighted a 26% decline in traffic from 30m pax in 2007 to just 22m in 2011. While many UK and EU airports delivered growth in 2011 by reducing charges, the DAA monopoly (protected by the Dept of Transport) raised fees by 40% and delivered another year of underlying traffic declines. Sadly, the new Irish government has failed to deliver any change or reform in airport or tourism policy and failed to scrap the €3 tourist tax. Ireland needs competition between Dublin, Cork & Shannon airports in order to reduce the DAA’s high airport charges, and return our tourism industry to growth, which will create thousands of badly needed entry level jobs in the Irish economy. We will continue to campaign for this change and reform, since the Dept of Transport’s current policy of protecting the DAA monopoly and raising access costs clearly isn’t working.

Our Q3 Net Profit of €15m was slightly ahead of guidance due to a combination of benign weather which caused fewer flight cancellations and significant de-icing savings, and a better performance on yields reflecting our planned winter capacity cuts, longer sectors, and higher competitor fares/fuel surcharges. Should these positive Q3 trends continue into Q4, we now expect our full year profit will exceed previous guidance (of €440m) and rise to €480m.

EGM to approve ADR share buy back.

Our September 2011 AGM authorised the board to buy-back ordinary shares representing up to 5% of our issued shared capital. However, EU ownership rules require that at least 50% of the Company be owned by EU nationals.

In order to facilitate further share buy-backs, the board intends to hold an EGM in March 2012 to seek shareholder approval to include ADR’s as well as ordinary shares in future buy-back programs for up to 5% of our issued share capital. A detailed letter to shareholders explaining these matters will be issued in due course and the Board believes that shareholders will support this proposal which will be subject to Stock Exchange and regulatory approvals in due course.”

Copyright Photo: Antony J. Best.

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