* Profit after tax up 6 percent to 1.3 billion
* Forecasts growth of 8 percent in coming year
* Ticket price falls to slow
* Shares down 1.5; analyst says forecast 'muted'
(Adds management comments, share price)
By Conor Humphries
DUBLIN, May 30 Ryanair posted record
annual profits on Tuesday as its strategy paid off of continuing
to expand in Europe despite an already crowded market, and vowed
to set a new record for profits next year while cutting ticket
prices by up to 7 percent.
The Irish low-cost pioneer in Europe added almost 14 million
seats in the year to March 31 with fares discounted by an
average of 13 percent on the previous year's as it continued to
cut unit costs by increasing loadings and securing cheaper
airport user charges as traffic increases.
Its costs were also cut significantly by the fall in the
value of sterling over the past year and looking ahead the
airline expects to gain significant savings from new more fuel
efficient planes with more seats and from a five-year pay deal
"The gap is widening between Ryanair and our competitors,”
Chief Executive Michael O’Leary said.
Last year, despite lower fares Ryanair earned a record net
profit of 1.316 billion euros ($1.46 billion), in line with
"Given the terrorist attacks and a big shift in capacity
from North Africa Egypt and Turkey into Spain creating
overcapacity, it was a good year," chief commercial officer
David O'Brien said.
The airline said it expected to increase its net profit in
the current year by around 8 percent to between 1.4 billion and
1.45 billion euros by adding an additional 10 million seats of
capacity while allowing fares to fall by a more modest 5 to 7
The profit forecast was slightly behind the average forecast
given in a poll of analysts of 1.455 billion and Ryanair shares
were initially down 1.5 percent but were up 0.23 percent at
17.79 euros by 0748 GMT, just short of the year's high of 17.93
set last week.
"This is a slightly disappointing statement, with
everything a little more muted than we had forecast," Goodbody
Stockbrokers analyst Mark Simpson said in a note.
PRICE FALLS SLOW
After years of falling ticket prices, some rival European
carriers in recent weeks have reported seeing signs of a
turnaround as the decline in fares slows.
British Airways owner IAG had said before it was
hit by a disastrous IT failure at the weekend that
it expected quarterly revenue per passenger mile flown to
register its first year-on-year increase since 2014 in the three
months to the end of June.
Air France and Lufthansa have also said
that the pricing environment and bookings are improving heading
into the summer.
"We are maybe a little less optimistic than some of the
other airlines out there on pricing but we are all singing the
same tune," Chief Financial Officer Neil Sorahan told Reuters.
Ryanair's cost base, already the lowest in the industry,
fell 5 percent last year after fuel price falls were excluded
and will fall a further 1 percent this year, Sorahan said.
In a sign of Ryanair's financial confidence, Sorahan
announced a new 600 million-euro share buyback to start
However, O'Leary warned that there were a number of
potential clouds on the horizon, including Brexit negotiations
which he has said could lead to a total breakdown in all flights
between Britain and the EU for a time.
The impact on bookings of the recent suicide bombing in
Manchester in which 22 people died was likely to be short-lived,
but an additional attack could knock bookings off course, he
"Investors should be wary of the risk of negative Brexit
developments, or any repeat of last year’s security events at
European cities, which could damage consumer confidence,"
($1 = 0.8990 euros)
(Editing by Stephen Coates, Greg Mahlich)