Ryanair vows to pick off the stragglers after 32 per cent rise in profits

Ryanair raised its annual profit forecast almost 20 per cent on Monday thanks to a surge in winter bookings and said it would cut fares by up to 10 per cent in the new year to take more market share from struggling airline rivals. The improved guidance comes after Europe’s largest low-cost carrier slashed fees, improved its web site and boosted its marketing budget after outspoken chief executive Michael O’Leary admitted excessive cost-cutting was scaring customers away. It now predicts profit after tax for the year to March of between $937m and $962m, up from a previous forecast of $774m to $812m and well ahead of an average forecast of $867m in a company poll of analysts.

We are keeping prices low while improving the service. It’s as simple as that.

Ryanair Chief Executive Michael O’Leary

Profit after tax for the six months to September, the first half of Ryanair’s financial year, was up 32 per cent. Higher cost rivals Lufthansa and Air France have both lowered their profit forecasts in recent days on increased competition and the cost of industrial action. “We’ve had a bumper half year and we’ve had to boost our guidance as we got visibility on the second half of the year,” said Chief Executive Michael O’Leary. Ryanair said it plans to cut fares by up to 5 per cent in the three months to December and by up to 10 per cent in the first three months of next year.

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