Ryanair raises profit outlook for third time

The worst of the recession appears to be over for the aviation industry after Ryanair yesterday revised its profit forecast upwards for the third straight quarter. The budget carrier’s announcement saw shares gain a huge 8 per cent as Ryanair declared that as of March, profits would be at least €310 million (£275 million).

The news will no doubt buoy the aviation industry as Ryanair is the largest European carrier by passenger numbers and is therefore seen as a trend-leader by many analysts. The figure is in stark contrast to last year’s loss of €169.2 million, and represents a significant rise from the formerly projected figures, issued in November, that were in the low €200 million region

The announcement also bucks the trend of airlines losing money in the traditionally slow winter quarter which has always hindered airline profits. However, a late unexpected surge in passenger numbers, aided somewhat by the deepening crisis at British Airways, enabled the higher outlook. The actual revenue per seat, or seat yield, has also performed far greater than anticipated, which has been seen as a strong indication that the aviation market is beginning to right itself.

The carrier’s trading philosophy, which is built around low ticket prices, enabled it to survive relatively unscathed during the global economic downturn, where many airlines were forced into massive fare reductions and reduced flights. Ryanair’s aggressive approach to budget fares meant it has been able to stay one step ahead of the competition.