Shares in budget airline Ryanair (RYA) rose 4.4% to €15.50 after it swung to a profit in its third quarter results.
The firm reported a third quarter net profit of €88m, compared to a €66m loss in the same quarter last year.
However, longer term problems loom as the airline warned its passenger growth is expected to fall as the airline continues to be impacted by delays to the Boeing 737 MAX.
The airline doesn’t expect to get the aircraft until September or October at the earliest, meaning it has had to push back its target of flying 200m passengers a year until 2025 or 2026.
BOEING 737 MAX A ‘GAMECHANGER’
Ryanair is persevering with the aircraft as it believes the 737 MAX will be a ‘game changer’ for the business once up and running.
The airline said the planes will have 4% more seats and burn 16% less fuel, with the ability to ‘transform’ the firm’s cost base and business ‘for the next decade’.
While the delays will cause problems ahead, in the short term the picture looks a little brighter with a 6% rise in passenger traffic helping drive a 13% increase in revenue per passenger and its swing to a net profit.
BETTER XMAS AND NEW YEAR DRIVES PROFIT
The airline said the strong third quarter results were driven by more bookings over Christmas and New Year, something other budget airlines including rivals Wizz Air (WIZZ) and EasyJet (EZJ) have also experienced.
As a result, Ryanair said full year net profit is likely to be at the mid point range of its guidance between €0.95-1.05bn.
Sales in the third quarter grew 21% to €1.91bn, with scheduled revenue up 16% to €1.19bn as the airline carried 36m passengers at 9% higher fares.
Ancillary revenue, an important income stream for airlines, increased by 28% to €0.72bn as more passengers chose its priority boarding and preferred seat services.
