Seat charges help Ryanair profit meet forecast

Dublin — Cutbacks by rivals and extra charges for choosing seats helped low-cost airline Ryanair meet forecasts with profit of €78 million ($103 million) in the three months to June, the Irish airline said on Monday.

 

Carriers like Ryanair have been quick to exploit gaps in the market left by higher-cost rivals like British Airways, owned by IAG, and Air France-KLM cutting short-haul routes due to fuel costs and weak consumer confidence.

 

That helped push shares in Europe's biggest budget airline to an all-time high in June. British budget rival easyjet's stock also hit its highest ever last week after it reported a bumper spring season.

 

Ryanair benefited in its first quarter from an increase in so-called "ancillary" charges, particularly the roll-out of advance booking for specific seats across the network, allowing passengers to bypass an unruly rush at departure gates.

 

"We've been pleasantly surprised with the uptake—passengers want reserved seats," Chief Financial Officer Howard Millar told Reuters.

 

Net profit compared with a forecast of €78 million in a poll of over 20 analysts by the company and was 21 percent lower than a year ago.

 

The Dublin-based airline, famous for its no-frills service, maintained its forecast for earnings of €570 million-€600 million in its full year to end-March 2014, versus last year's record of €569 million.

 

The airline, however, said its average fares fell 4 percent due to the timing of Easter and impact of air traffic control strikes in France, while non-ticket income from extras such as baggage and reserved seating rose 25 percent. — Reuters