This guidance excludes (exceptional) start-up losses in Lauda, which have been cut from 150m to 140m euros on the back of better than expected unit cost performance during the winter period.
Ryanair lowered its full year profit guidance (excl. Lauda) from a current PAT range of 1.1bn – 1.2bn euros to a new range of 1.0bn – 1.1bn euros due to:
- Lower winter fares, which are expected to fall 7% (previous guidance -2%);
- Stronger traffic growth, up 9% to 142m (prev. guidance of 141m);
- Stronger ancillary sales as more customers choose lower cost optional services;
- Slightly better than expected H2 unit cost performance.
This guidance excludes (exceptional) start-up losses in Lauda, which have been cut from 150m to 140m euros on the back of better than expected unit cost performance during the winter period.
Ryanair’s Michael O’Leary said: “While we are disappointed at this slightly lower full year guidance, the fact that it is the direct result of lower than expected H2 air fares, offset by stronger than expected traffic growth, a better than expected performance on unit cost and ancillary sales is positive for the medium term. There is short haul over capacity in Europe this winter, but Ryanair continues to pursue our price passive/load factor active strategy to the benefit of our customers who are enjoying record lower air fares. We believe this lower fare environment will continue to shake out more loss making competitors, with WOW, Flybe, and reportedly Germania for example, all currently for sale.
Both Ryanair and Lauda will report stronger than expected traffic growth, an improving ancillary revenue performance, and strong unit cost discipline this winter, which helps to defray the impact of these lower than expected winter fares. The fact that we are passing on these benefits, in the form of lower air fares, to customers is good for Ryanair’s traffic growth, good for our business over the medium and long term, and good for market share as evidenced by Norwegian’s recent announcement of its plans to close bases in Rome, Gran Canaria, Tenerife and Palma, where they competed head to head with Ryanair.
While we have reasonable visibility over forward Q4 bookings, we cannot rule out further cuts to air fares and/or slightly lower full year guidance if there are unexpected Brexit or security developments which adversely impact yields between now and the end of March. As we are in a closed period, we will update shareholders in detail on these developments following our Q3 results release on Mon 4th Feb.”
Ryanair and SiteMinder partnership takes off for European hotels
Ryanair and SiteMinder, the global hotel industry’s leading guest acquisition platform, announced a partnership to provide European hotels direct access to sell their properties on Ryanair Rooms.
Ryanair Rooms is the only hotel booking website that gives hotel guests 10% of the hotel booking price back in flight credit, to use against Ryanair flights. The website is now available as a distribution channel to SiteMinder’s 30,000 hotel customers across Europe and around the world, which can now offer their guests a new incentive to ‘Go Direct’.
Matt Sherlock, Ryanair’s Head of Hotel Supply, said: “Ryanair Rooms has experienced rapid growth since its launch and we are delighted with the volume of bookings on the system. We are taking our hotel booking platform to the next level, and SiteMinder’s deep footprint across Europe offers us an incredible opportunity to further expand our inventory throughout the region.”
Dai Williams, Global SVP Partnerships at SiteMinder said: “We are thrilled to partner with Ryanair, a long-time disruptor in travel. The limitless array of booking options that are now available to consumers has borne a rising trend of travellers who are looking to their preferred travel suppliers, such as Ryanair, not only for flights, but accommodation, to complete their itineraries and escape browsing fatigue. Through this partnership, Europe’s hotels can now be more visible to this growing subset of travellers and convert them into guests.”
Ryanair Rooms gives hotels access to 140 million customers on Europe’s No.1 travel platform, Ryanair.com, attracting 1 billion visits per annum and offering over 10 million rooms at more than 400,000 properties, from 2 to 5 stars.
Theodore is the Co-Founder and Managing Editor of TravelDailyNews Media Network; his responsibilities include business development and planning for TravelDailyNews long-term opportunities.
