Ryanair raises profits forecast

Michael O'LearyRyanair boss Michael O'Leary has hiked his airline's forecast for annual profits after a better-than-expected summer for the low-cost carrier.

With passenger numbers up 7% to 48 million in the six months to September 30 and a 6% rise in average fares accompanied by a lower than expected fuel bill, half-year profits rose 10% to 596 million euros (£478 million).
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Mr O'Leary said there was very little visibility on winter bookings but added that Ryanair would now make full-year profits of between 490 million and 520 million euros (£392 million-£416 million), up from 400 million to 440 million euros previously forecast.

The airline will ground up to 80 aircraft this winter as a result of high oil prices, airport fees at Stansted and Dublin airports and seasonally weaker demand.

It expects traffic will be broadly flat over the current half year, leading to growth in full-year passenger numbers of 4% to 79 million. Summer bookings exceeded expectations, partly due to a post-Olympics surge in demand.

The airline added: "We expect market conditions to remain tough as recession, austerity, high fuel costs, and excessive Government taxes dampen air travel demand. Further airline failures and consolidations are inevitable."

The Dublin-based carrier, which operates more than 1,500 flights a day across 28 countries, recently said it would add nine new routes to its airports in Manchester, Liverpool and East Midlands. Half-year costs were up 8%, mainly as a result of a 24% or 218 million euros (£175 million) increase in its fuel bill. Ryanair's shares were 9% higher on Monday.

Ryanair's said it was "determined to explore all commercial options" in its attempt to get clearance for its proposed takeover of Aer Lingus.

It recently said it would move some of Aer Lingus's planes to continental Europe to operate non-Irish routes to allay concerns about a near monopoly in the Irish market. Ryanair, which already owns 30% of Aer Lingus, will scrap some of its own routes from Ireland to persuade regulators to drop a previous merger rejection.

The European Commission is to rule by January on Ryanair's 700 million euro (£560 million) bid. Ryanair had an initial offer turned down by the commission in 2007 and dropped a second bid in 2009.
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