Category Archives: Ryanair

Ryanair to open a new Southend base in the summer of 2019

Ryanair Boeing 737-8AS WL EI-FIM (msn 61576) BUD (Tony Storck). Image: 940737.

Ryanair on June 13 announced it will open a new base at London Southend Airport, from April 2019, with three based Boeing 737-800 aircraft and 13 new routes to 8 countries, including Alicante (5 weekly), Barcelona Reus (twice-weekly), Bilbao (4 weekly), Brest (twice-weekly), Corfu (twice-weekly), Cluj (3 weekly), Dublin (twice-daily), Faro (5 weekly), Kosice (3 weekly), Malaga (5 weekly), Milan Bergamo (4 weekly), Palma de Mallorca (4 weekly) and Venice (4 weekly), which will deliver 1 million guests annually at London Southend Airport.

Top Copyright Photo: Ryanair Boeing 737-8AS WL EI-FIM (msn 61576) BUD (Tony Storck). Image: 940737.

Ryanair aircraft slide show:

 

 

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Ryanair, ANPAC and ANPAV sign first recognition agreement for Italian Based Cabin Crew

Ryanair Boeing 737-8AS WL EI-EBY (msn 35006) TLS (Paul Bannwarth). Image: 940736.

Ryanair on June 6 confirmed that it has signed its first cabin crew union recognition agreement with ANPAC and ANPAV, who will be the representative body for Ryanair directly employed cabin crew in Italy. This agreement follows extensive negotiations with ANPAC and ANPAV since Ryanair’s December 2017 announcement that it was willing to recognise Unions for collective bargaining purposes.

Ryanair welcomed the constructive engagement of ANPAC and ANPAV which led to the signing of this first cabin crew recognition agreement, in Italy, which currently accounts for over 80 of Ryanair’s 400+ aircraft fleet and approx. 20% of Ryanair’s cabin crew. Ryanair looks forward to working with ANPAC and ANPAV and its newly elected Ryanair (Cabin Crew) Company Council to conclude an early CLA for our directly employed cabin crew based in Italy.

Ryanair’s Chief People Officer Eddie Wilson said:

“We are pleased to announce this recognition agreement with ANPAC and ANPAV on behalf of our directly employed cabin crew in Italy. This is our first cabin crew union recognition agreement (which follows recognition agreements with pilot unions in the UK and Italy earlier this year) and further demonstrates Ryanair’s progress on  recognising and negotiating with unions across Europe for our people. We are making good progress with other cabin crew unions across Europe and we hope to sign more recognition agreements with both pilot and cabin crew unions in the coming weeks.”

Copyright Photo: Ryanair Boeing 737-8AS WL EI-EBY (msn 35006) TLS (Paul Bannwarth). Image: 940736.

Ryanair aircraft slide show:

Ryanair full year fiscal profit rises 10% to €1.45 billion, starts Liverpool – Shannon flights

"Vitoria - The Basque Connection"

Ryanair announced its financial results for the past fiscal year:

Ryanair on May 21, 2018 reported a 10% increase in full year profit after tax to €1.45 billion, as lower fares (down 3%) stimulated 9% traffic growth to over 130 million guests, and an industry leading 95% load factor.

Year End 31 Mar Results (IFRS) Mar 31, 2017 Mar 31, 2018 % Change
 Guests (m) 120.0 130.3 +9%
 Revenue (m) €6,648 €7,151 +8%
 Profit after Tax (m) €1,316 €1,450 +10%
 Net Margin 20% 20%
 Basic EPS €1.053 €1.215 +15%

     

Ryanair’s CEO Michael O’Leary said:

 “We are pleased to report a 10% increase in profits, with an unchanged net margin of 20%, despite a 3% cut in air fares, during a year of overcapacity in Europe, leading to a weaker fare environment, rising fuel prices, and the recovery from our Sept. 2017 rostering management failure. Highlights of the last year include:

– Traffic grew 9% to over 130m, despite grounding 25 winter aircraft

– Average fare fell 3% to just €39.40

– Unit costs were cut by 1% (ex-fuel they rose +3%)

– Ryanair Labs stimulated record ancillary spend (+4% per guest)

– We took delivery of 50 B737 aircraft, bringing the fleet to 430 units

– We created 1,500 new jobs, and over 600 promotions

– New 5 year pay deals were concluded with most of our pilots and cabin crew

– Over €800m was returned to shareholders via buybacks

– We recovered quickly from the Sept. 2017 pilot rostering failure

 

Sales:
Average fares last year declined by 3%, which was good news for our guests but bad news for competitors. Traffic grew 9% to over 130m with Germany, Italy and Spain being our 3 largest growth markets. We expect above average EU capacity growth to continue into FY19, which will have a downward effect on fares. This may be partly ameliorated by the switch of some charter capacity back to previously security challenged markets such as Turkey and Egypt. We expect later in the year, some upward pressure on pricing as significantly higher oil prices impact margins, especially those EU airlines who continue to expand despite having no prospect of achieving profitability. Ryanair will continue to pursue our load factor active/yield passive strategy. No other EU airline can compete with Ryanair’s prices.

During FY18 we took delivery of 50 new B737’s, and increased our Boeing order to 135 firm MAX-200 Gamechangers, with a further 75 under option (210 in total). We opened 4 bases in Burgas, Memmingen, Naples & Poznan and launched over 260 new routes. This summer, we have announced over 200 new routes including markets in Jordan, Turkey and the Ukraine. We continue to grow strongly in Germany, Italy and the UK, and our Polish charter airline, Ryanair Sun, operated its first flights in April 2018.

Ancillaries, Labs & Customer Service:

Ryanair Labs continues to deliver improvements in Customer Service, mobile & digital platforms, and our ancillary sales conversions. Labs has established 3 development offices in Dublin, Wroclaw, and Madrid, and employs almost 600 highly skilled digital professionals.

“MyRyanair” membership has grown to 43m, while our website & app has over 1 billion visits p.a. Our improved mobile and digital platforms have delivered a 13% increase in ancillary revenues (+4% per guest) to over €2bn. Ancillaries now deliver 28% of revenue and we are well on track to achieve our 5 year goal of 30%. More guests are switching to our great value “plus” fares, reserved seating, priority boarding, and car hire. Ryanair Rooms penetration is rising steadily, albeit from a low base, as our guests recognise our unique combination of lowest hotel prices and travel credits.

In the area of Customer Service, we have lowered our checked bag fees while increasing the bag allowance (to 20kg). Our amended 2 cabin bag policy (1 of which goes in the hold f.o.c. for non-priority guests) has improved boarding and punctuality, and we are expanding our offers in areas such as FastTrack, and ground transport connections. In March we launched our new environmental policy, which commits Ryanair to a series of industry leading environmental targets, including moving to “plastic free” within 5 years, while allowing our guests to contribute voluntarily to our carbon offset programme, the proceeds of which will be applied to support selected environmental projects.

Over the last year our on-time performance has declined by 2% from 88% to 86%. All of this decline was accounted for by increased ATC delays due to strikes and staffing/capacity shortages mainly in France, Germany and Italy. The delivery of ATC services in Europe is lamentable and creating unacceptable delays for our customers. Punctuality in Q4 was negatively impacted by unusually adverse weather conditions, which led to multiple airport snow closures at key bases including Dublin and Stansted for a number of days in late February/early March. We are working hard to increase staffing at our larger bases, re-designing boarding procedures, and providing additional spare aircraft in S.18 to improve our punctuality to our 90% target, which is a key AGB target for the coming year.

Costs:

Ryanair enjoys a significant cost advantage over all other EU airlines, and we expect this leadership to continue. In FY18, unit costs – helped by our fuel hedging – fell 1%. Even as traffic grew 9%, ex-fuel unit costs rose 3% mainly due to one-off EU261 costs arising from our Sept. 2017 cancellations, and higher H2 staff costs as we agreed substantial pay increases and 5 year pay deals with our pilots and cabin crew. We expect the market for experienced pilots in Europe to remain tight for the next 12 months, and accordingly, this will continue to put upward pressure on staff costs for all EU airlines.

In FY19 we will invest substantially in our people, our systems, and our business as we scale up the operation to take delivery of 210 Boeing Gamechangeraircraft over the next 6 years. This will lead to a modest increase in ex-fuel unit costs next year but will underpin our growth to almost 600 aircraft and 200m guests p.a. by FY24. We expect staff costs to rise by almost €200m, half of which is higher pay for our front line people and half is additional headcount for growth.

Fuel will be a major cost headwind for the next 24 months. We are currently 90% hedged for FY19 at approx. $58pbl, which is well below current spot prices of almost $80pbl. While US Shale production remains strong, world demand for oil is growing, and a number of short term political factors in Venezuela, Libya and Iran, suggests that prices will continue to be elevated for the coming year. Air fares tend to follow oil prices (as they have downwards over the last 3 years) but with a lag of up to 12 months before higher oil prices feed through to higher air fares. Accordingly, we expect unit costs over the next year to rise by 9% (ex-fuel they will increase by 6%). Thereafter, we expect the impact of the lower seat cost Boeing 737-MAX aircraft, our new lower cost 10 year engine maintenance agreement, as well as airport growth opportunities and the disposal of older aircraft, to deliver flat or slightly declining non-fuel unit costs.

Labour Cost:

While we have made a promising start in negotiations with pilot unions, including signed recognition agreements with BALPA (UK) and ANPAC (Italy), we are also making considerable progress with our cabin crew negotiations, most notably in the UK and Spain. We suffered a 1 day pilot strike in Germany (Dec. 2017), and 3 days of cabin crew strikes in Portugal (in March/April), but in all cases, the majority of our people continued to work normally so these strikes had minimal impact on our operations. Our combination of higher pay, improved rosters, and unmatched job security will, we believe, continue to make Ryanair an employer of choice in the EU airline sector. We’re welcoming hundreds of new pilots and cabin crew to Ryanair this year, including many joiners from bankrupt airlines such as Monarch and Air Berlin among others. We will continue to deal openly and fairly with our people and their unions, but we will not make concessions on pay or productivity which threatens either our low cost model or our cost leadership in Europe.

Consolidation:

The industry in Europe continues to consolidate into 5 large airline groups. In the last year, Monarch went bust, Lufthansa acquired Air Berlin, and more recently IAG made an offer to acquire loss making Norwegian. During the period, Ryanair established a Polish charter airline, Ryanair Sun, which started flying in April and looks set to trade profitably in its first 12 months of operation. In April, we acquired 24.9% of LaudaMotion, and are working to increase that stake to 75% (subject to EU merger approval) so that we can work with Niki Lauda and his team to re-launch LaudaMotion as Austria’s No.1 low fares airline, serving markets from Austria and Germany to sun destinations primarily in Spain. LaudaMotion is an attractive opportunity as it is an Airbus operator, and we are looking for opportunities to grow its Airbus fleet to 30-50 aircraft over the next 5 years. LaudaMotion has a valuable portfolio of slots at many congested airports in Germany, Vienna, and Palma de Mallorca.  We believe that by investing in these separate airlines, we can build a substantial and profitable group of EU airlines under the Ryanair Holdings banner over the next 3 years, when it is likely that further M&A opportunities will arise. LaudaMotion will require almost €100m in start-up costs, and operating losses over the next 2 years in large measure due to expensive aircraft leases from Lufthansa. Once these leases expire, we expect LaudaMotion to be modestly profitable and self-sustaining as it grows its low fare offerings in Germany and Austria.

Brexit:

We remain concerned at the likely impact of a hard Brexit. While there is a general belief that an 18 month transition agreement from March 2019 to December 2020 will be implemented and further extended, it is in the best interest of our shareholders that we continue to plan for a hard Brexit in March 2019. In these circumstances, it is likely that our UK shareholders will be treated as non-EU and this could potentially affect Ryanair’s licencing and flight rights. Accordingly, in line with our Articles, we intend to restrict the voting rights of all non-EU shareholders in the event of a hard Brexit, so that we can ensure that Ryanair is majority owned and controlled by EU shareholders at all times to comply with our licences. This would result in non-EU shareholders not being able to vote on shareholder resolutions. In the meantime, we have applied for a UK AOC which we hope to receive before the end of 2018.

Balance Sheet & Cash:

Ryanair’s balance sheet remains one of the strongest in the industry. At year end, our balance sheet included 400 owned B737 aircraft, all of which were added at their net purchase price, which is a significant discount to their current market value. Ryanair continues to generate significant cash flows. In the past year, we generated over €2bn cash from operations. Despite capex of €1.5bn, and share buybacks of over €800m, year-end net debt at March 2018 was broadly flat at €283m. In Feb., the Board approved another €750m share buyback, which we expect to complete at the end of Oct. 2018. Including this buyback, Ryanair will have returned over €6bn to our shareholders since 2008. The success of our share buyback programme is demonstrated by our 15% EPS growth in FY18 at a time when profits rose 10%.

Outlook & Guidance

Our Outlook for FY19 is on the pessimistic side of cautious. We expect to grow traffic by 7% to 139m, at flat load factors of 95%. Unit costs this year will rise 9% due to higher staff and oil prices which will, when adjusted for volume growth, add more than €400m to our fuel bill. Ex-fuel unit cost will rise by up to 6% as we annualise pilot and cabin crew pay increases, and invest in our business and our systems to facilitate a 6 year growth plan to 600 aircraft and 200m guests p.a.

We have limited H1 and zero H2 fare visibility. Forward bookings are strong but pricing remains soft. Since only half of Easter fell in April, we expect a 5% fare decline in Q1 but a 4% rise in Q2 fares. While still too early to accurately forecast close-in summer bookings or H2 fares, we are cautiously guiding broadly flat average fares for FY19. Ancillary revenues will grow as penetration of customer services continues to rise. We do not expect ancillary revenue growth to fully offset higher costs and lower fares, and so we expect FY19 profits will fall to a range of €1.25bn to €1.35bn. This guidance is heavily dependent on H2 fares, a “normal” level of ATC disruptions for S.18, the absence of unforeseen security events, and no negative Brexit developments during this period.

We have not included our investment in LaudaMotion in the above outlook as any increase to a 75% share ownership remains subject to EU Competition approval. We expect approx. €100m of start-up costs, and operating losses for LaudaMotion if and or/when our proposal to take majority ownership receives regulatory approval.”

In other news, Ryanair on May 21 celebrated its new Liverpool to Shannon service, which will operate 3 times weekly as part of its Summer 2018 schedule.

Photo: Ryanair.

This is Ryanair’s 4th Irish service from Liverpool, in addition to Dublin (4 daily), Cork (4 weekly) and Knock (5 weekly).

Top Copyright Photo: Ryanair Boeing 737-8AS WL EI-EVY (msn 40319) (Vitoria – The Basque Connection) AMS (Ton Jochems). Image: 941989.

Ryanair aircraft slide show:

Ryanair Sun is now flying

Ryanair (Sun) (Poland) Boeing 737-8AS WL SP-RSA (msn 44686) PMI (Javier Rodriguez). Image: 941972.

Ryanair Sun, a standalone business unit of the Ryanair Group, is now up and flying. The new airline will be flying Polish charter passangers around Europe this summer. 
The first Boeing 737-800 is the pictured 737-8AS SP-RSA (msn 44686), formerly EI-FEE. 
Operations commenced on April 26, 2018 with a Poznan-Zakynthos flight.
Copyright Photo: Ryanair (Sun) (Poland) Boeing 737-8AS WL SP-RSA (msn 44686) PMI (Javier Rodriguez). Image: 941972.

Ryanair to open a new Düsseldorf base, its 86th

Ryanair Boeing 737-8AS WL EI-DPB (msn 33603) TLS (Paul Bannwarth). Image: 940735.

Ryanair has announced that it will open a new base at Düsseldorf Airport from June, its 11th base in Germany and 86th in Europe, with 1 based aircraft, as it launched two new summer routes to Alicante and Malaga. These new Ryanair routes are in addition to the daily service to Palma de Mallorca which was announced earlier this year and the 12 routes operated on behalf of LaudaMotion.

 

 

Copyright Photo: Ryanair Boeing 737-8AS WL EI-DPB (msn 33603) TLS (Paul Bannwarth). Image: 940735.

Ryanair aircraft slide show:

Ryanair finalizes its order for 25 additional Boeing 737-8 MAX 8s

Ryanair and Boeing on April 24, 2018 announced they finalized an order for 25 additional high-capacity 737 MAX 8 airplanes. The $3 billion order, at current list prices, was previously listed as unidentified on Boeing’s Orders & Deliveries website.

“We are pleased to announce the exercise of 25 Boeing 737 “Gamechanger” options, bringing our firm order to 135 737 MAX 8s,” said Neil Sorahan, chief financial officer, Ryanair. “The Gamechanger has eight more seats than our current 189-seat Boeing 737-800NG and incorporates the latest technology engines and winglets which reduce fuel consumption and noise emissions, ensuring we remain Europe’s greenest, cleanest airline and lowest cost airline.  We look forward to taking delivery of our first Gamechanger in Spring 2019.”

Ryanair launched the high-capacity 737 MAX 8 in late 2014 with an order for 100 airplanes, followed by an additional order for 10 airplanes at the 2017 Paris Air Show. The airplane will provide Ryanair with 197 seats, increasing revenue potential and delivering up to 14 percent lower fuel consumption than today’s Next-Generation 737s.

The Dublin-based carrier is the largest 737-800 customer in the world and the largest Boeing operator in Europe. Last month, Ryanair took delivery of its 500th Next-Generation 737-800 and has now ordered more than 650 Boeing airplanes.

The 737 MAX incorporates the latest CFM International LEAP-1B engines, Advanced Technology winglets, Boeing Sky Interior, large flight deck displays and other features to deliver the highest efficiency, reliability and passenger comfort in the single-aisle market.

LaudaMotion and Ryanair partnership takes off with new details

LaudaMotion and Ryanair on March 28 announced details of the LaudaMotion summer 2018 schedule with a total of 21 aircraft operating from 9 cities in Austria and Germany from June.

LaudaMotion’s summer 2018 schedule will deliver:

– 21 aircraft

– 9 bases in three countries:

Austria – Vienna

Germany – Berlin Tegel, Cologne, Dusseldorf, Frankfurt, Munich, Nuremberg, Stuttgart

Switzerland – Zurich

– 44 airports

– 65 routes

Last week, LaudaMotion and Ryanair announced a new aviation partnership where the Irish airline is initially taking a 24.9% stake in LaudaMotion, which will increase to 75% subject to approval by the EU Competition Authority. The aim is to further develop and expand Austria’s LaudaMotion GmbH, headquartered in Vienna.

Niki Lauda will chair the newly created LaudaMotion Board and will be responsible in his new role for establishing LaudaMotion as an Austrian low-fare airline for the scheduled and charter market.

This agreement with Ryanair will allow the gradual growth of LaudaMotion in Austria which currently has a fleet of ten Airbus aircraft. Ryanair will provide financial and management support to LaudaMotion as well as 6 wet-lease aircraft for summer to enable LaudaMotion to complete an extensive 21 aircraft flying program from June.

Four aircraft will be based in Vienna and the frequency of flights to Palma de Mallorca will increase to up to three daily connections. Four LaudaMotion aircraft will be based in Berlin Tegel, six in Dusseldorf, one each in Cologne, Frankfurt, Munich, Nuremberg and Stuttgart respectively, with two in Zurich.

LaudaMotion’s new Berlin Tegel base will open on June 1, 2018 with four based aircraft, offering low fare routes to 17 sunshine destinations: Barcelona, Brindisi, Corfu, Faro, Fuerteventura, Heraklion, Ibiza, Kos, Lanzarote, Las Palmas, Malaga, Milan Malpensa, Palma de Mallorca, Pula, Rhodes, Rijeka and Tenerife.

This coming winter, LaudaMotion will focus on a city shuttle service with up to three more aircraft based in Vienna, allowing Austrian customers to benefit from a wider selection of flights at affordable prices to Europe’s major cities.

The inaugural LaudaMotion flight from Dusseldorf to Palma de Mallorca took off last Sunday in record time – just 25 days after the takeover from Niki on March 1, 2018. The Spanish sunshine isle is one of the most important destinations in the LaudaMotion route network.

 

In Vienna, Niki Lauda, LaudaMotion Chairman said:

“I am pleased to confirm that LaudaMotion is now up and running and I would like to thank the Laudamotion team for all their hard work and enthusiasm, which has allowed us to start efficiently and on time. We look forward to building the Laudamotion brand and to creating new jobs, more promotional opportunities and greater consumer choice, particularly in Vienna where we will more than double our Airbus aircraft base next year.

I am pleased to welcome Michael O’Leary and the Ryanair team to Vienna to mark the start of our partnership, which will see Laudamotion grow its fleet to more than 30 Airbus aircraft and provide wider choice and lower fares to Viennese consumers and visitors.”

  

Ryanair’s CEO Michael O’Leary said:

“Ryanair is pleased to support this first summer schedule for LaudaMotion, which is great news for Austrian consumers and visitors, who can now book low fare flights and benefit from genuine competition and more choice. We share Niki Lauda’s vision to develop a successful Austrian low fares airline in a market dominated by Lufthansa’s high fare Austrian and Swiss subsidiaries. Indeed, Laudamotion is now in pole position to accelerate rapidly in both the scheduled and charter markets in Austria, Germany and Switzerland.

This partnership will be of enormous benefit to both Ryanair and Laudamotion customers. The LaudaMotion AOC will support a fleet of Airbus aircraft, which is something we have hoped to develop within the Ryanair Group for some years. And in turn, Ryanair will support LaudaMotion by providing access to our fleet and financial resources, allowing for more rapid growth. This is also good news for LaudaMotion’s people, providing improved job security and promotional opportunities at Austria’s first low fares airline.”

Below Copyright Photo (all others by LaudaMotion): LaudaMotion Airbus A321-211 OE-LCG (msn 1988) (Airberlin colors) PMI (Javier Rodriguez). Image: 941370.

LaudaMotion aircraft slide show:

LaudaMotion Airbus A321-211 OE-LCG (msn 1988) (Airberlin colors) PMI (Javier Rodriguez). Image: 941370.