Pe@rson
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FR 3rd 3/4 Profit: Increased

Mon Feb 06, 2006 8:05 pm

"Ryanair today (6 Feb 2006) announced increased third quarter profits of €37m. Traffic grew by 26% to 8.6m passengers, whilst yields were almost flat, as expected, as total revenues rose by 27% to €370.7m. Unit costs increased by 3% (excluding fuel they fell by 6%) as fuel costs rose by 59% to €114.9m. As a result of these significantly higher fuel costs, Ryanair’s after tax margin, on an adjusted basis for the third quarter fell by 2 points to 10% as adjusted net profit increased by 6% to €37m."

Full article here: http://www.ryanair.com/site/EN/news....r=06&month=feb&story=reg-en-060206

Snippets from its long statement:

1) "The Ryanair model has proven that during difficult trading conditions that it can increase profitability and generate significant passenger growth while many of our competitors are reporting falling profits or losing money."

2) "Ancillary revenues [i.e. non-ticket revenue] grew by 31% significantly faster than the growth in passenger volumes and we expect that they will continue to outpace traffic growth this year."

3) "Our new routes and bases (Luton, Liverpool and Pisa) have performed well in their first winter whilst our yield performance at Shannon continues to be lower than originally expected."

4) "We remain cautious in our outlook for the remainder of the fourth quarter. We expect to achieve significant increases in passenger volumes but also anticipate that yields in Q4 will fall reflecting our large capacity growth in this weakest winter quarter as well as the impact of Easter falling in April (it was in March last year). These factors should result in yields being towards the middle of the range of –5% to –10%, previously guided."

5) "We estimate that the introduction of web check-in will be revenue neutral; however, we believe it will enable us to reduce Airport & Handling costs by up to €30m per annum."

[Edited 2006-02-06 12:13:33]
"Everyone writing for the Telegraph knows that the way to grab eyeballs is with Ryanair and/or sex."
 
RJ100
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RE: FR 3rd 3/4 Profit: Increased

Mon Feb 06, 2006 9:47 pm

Quite good results considering massive fuel costs and strong competition. It's interesting that both Ryanair and easyJet have surprisingly good results. Seems like both are very well positioned.

Do you know, James, if Ryanair still manages to achieve profits in all 4 quarters?

Regards,
RJ100
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Pe@rson
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RE: FR 3rd 3/4 Profit: Increased

Mon Feb 06, 2006 9:56 pm

Quoting RJ100 (Reply 1):
fuel costs

Stupidly high, but if you have to have it...  Smile

It's interesting to note that its unit costs would have decreased by 6% but for the huge increase in fuel costs, which overall meant its costs increased by 3%.

Quoting RJ100 (Reply 1):
Do you know, James, if Ryanair still manages to achieve profits in all 4 quarters?

I'll have to double-check, but I am confident that it almost always achieves a profit in the 4th quarter - even though the winter is the worst-performing period - but it's bound to be lower than the others due to lower yields (-5% to -10%), although if its auxiliary revenue generation remains high - an increase of 31% in this quarter - then...

I'm sure Mr. BestWestern can shed more light on this.
"Everyone writing for the Telegraph knows that the way to grab eyeballs is with Ryanair and/or sex."
 
BestWestern
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RE: FR 3rd 3/4 Profit: Increased

Mon Feb 06, 2006 10:17 pm

Quoting Pe@rson (Reply 2):
I'm sure Mr. BestWestern can shed more light on this

Sir will do.

Yes, amazingly FR manages to be profitable in every quarter. Probably the only airline anywhere that manages this.

Quoting Pe@rson (Thread starter):
performance at Shannon continues to be lower than originally expected

Shannon, the graveyard base of many a low cost carrier. (Virgin Express, EuJet, ABShannon) - even FR is having difficulties. Even with their inept management who pay FR to fly there the airport still cant attract passengers willing to pay the pittence FR needs.
You are 100 times more likely to catch a cold on a flight than an average person!
 
Pe@rson
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RE: FR 3rd 3/4 Profit: Increased

Mon Feb 06, 2006 10:23 pm

Quoting BestWestern (Reply 3):
Shannon, the graveyard base of many a low cost carrier. (Virgin Express, EuJet, ABShannon) - even FR is having difficulties.

Yep.

I guess ORK must be doing well, but I have no figures. Do you think there'll be any time when flights from SNN are moved to ORK, or will SNN continue to be the 'poorer relation'? I wonder whether ORK offers FR the same, or very similar, package as SNN. That would surely be an essential consideration. If some/all of the routes are performing badly from SNN, why aren't they stopped?

Quoting BestWestern (Reply 3):
Sir will do.

In which case King for me sounds about right.  Wow!  

[Edited 2006-02-06 14:24:48]
"Everyone writing for the Telegraph knows that the way to grab eyeballs is with Ryanair and/or sex."
 
RJ100
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RE: FR 3rd 3/4 Profit: Increased

Mon Feb 06, 2006 10:23 pm

Thanks  Smile

Does someone know how much of the revenue is made with stuff like onboard food/drinks, duty free sellings, car rentals etc.?

I think it is important just to fill the plane, even if you need to offer bargains during winter. Because as soon as you have people on board they will open their purses  Wink

Regards,
RJ100
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Pe@rson
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RE: FR 3rd 3/4 Profit: Increased

Mon Feb 06, 2006 10:30 pm

Quoting RJ100 (Reply 5):
Does someone know how much of the revenue is made with stuff like onboard food/drinks, duty free sellings, car rentals etc.?

About 2 years' ago, about 7% of FR's total annual revenue - and that's a gigantic amount - was from refreshment sales.

Auxiliary revenue generation is essential, hence the ever-increasing list of different forms thereof. There are numerous areas left which will undoubtedly be exploited.

From this quarter: "Ancillary revenues [i.e. non-ticket revenue] grew by 31% significantly faster than the growth in passenger volumes and we expect that they will continue to outpace traffic growth this year."

I read (I believe in January 2005 or perhaps in late 2004) that its income from car hire (remembering that it doesn't have cars itself but rather has a deal with a Hertz) was somewhere between £30 and £40 million per year, but I can't find the publication. It was also on a car-hire poster in a toilet in DUB (it wasn't a FR poster - it was a car-hire firm, showing how much you can save by cutting out the middle man).

[Edited 2006-02-06 14:32:52]
"Everyone writing for the Telegraph knows that the way to grab eyeballs is with Ryanair and/or sex."
 
RJ100
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RE: FR 3rd 3/4 Profit: Increased

Mon Feb 06, 2006 10:32 pm

Thanks again, very informative.  Smile
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cornish
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RE: FR 3rd 3/4 Profit: Increased

Mon Feb 06, 2006 10:35 pm

Quoting Pe@rson (Reply 6):
Auxiliary revenue generation is essential, hence the ever-increasing list of different forms thereof. There are numerous areas left which will undoubtedly be exploited.

In the last annual report they stated that ancilliary revenues were 208.5 million Euros - thats 16% of total revenues...
Just when I thought I could see light at the end of the tunnel, it was some B*****d with a torch bringing me more work
 
Pe@rson
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RE: FR 3rd 3/4 Profit: Increased

Mon Feb 06, 2006 10:40 pm

Quoting Cornish (Reply 8):
In the last annual report they stated that ancilliary revenues were 208.5 million Euros - thats 16% of total revenues...

Do you know the break-down of that? So, if it's increased by 31%, then AGR is now at 47% of total revenue.  Wow!
"Everyone writing for the Telegraph knows that the way to grab eyeballs is with Ryanair and/or sex."
 
7LBAC111
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RE: FR 3rd 3/4 Profit: Increased

Mon Feb 06, 2006 10:42 pm

Quoting BestWestern (Reply 3):
Shannon, the graveyard base of many a low cost carrier. (Virgin Express, EuJet, ABShannon

Totally off topic, but ah ... I miss ABShannon ...  cry 

I have nothing further of any quality to add to this discussion Big grin

7L
Debate is what you put on de hook when you want to catch de fish.
 
Pe@rson
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RE: FR 3rd 3/4 Profit: Increased

Mon Feb 06, 2006 10:44 pm

Quoting 7LBAC111 (Reply 10):
Totally off topic, but ah ... I miss ABShannon ...

I have nothing further of any quality to add to this discussion

No comment about the delight of refreshments in the 'goldern era'?  Wink
"Everyone writing for the Telegraph knows that the way to grab eyeballs is with Ryanair and/or sex."
 
cornish
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RE: FR 3rd 3/4 Profit: Increased

Mon Feb 06, 2006 10:44 pm

Quoting Pe@rson (Reply 9):
Quoting Cornish (Reply 8):
In the last annual report they stated that ancilliary revenues were 208.5 million Euros - thats 16% of total revenues...

Do you know the break-down of that? So, if it's increased by 31%, then AGR is now at 47% of total revenue.

I take it maths wasn't your strong point at university or school then James ?  Wink

Try again !  Smile
Just when I thought I could see light at the end of the tunnel, it was some B*****d with a torch bringing me more work
 
BestWestern
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RE: FR 3rd 3/4 Profit: Increased

Mon Feb 06, 2006 10:46 pm

The UK Short-haul LCC revenue outlook at the moment is Dire – all of the UK LCC focused carriers are having a really tough winter where yields have fallen through the floor. Those in the know are expecting a failure sometime very soon. The FR 6% revenue growth is the lowest I can remember, and I expected such a cautious forward outlook. Dark days out there.

(an excellent example for dire yields is my €17.26 peak morning flight from DUB to Heathrow with BD this morning– a fare including all taxes, surcharges, credit card charges, etc – oh, and the flight departed with 40 empty seats).

[Edited 2006-02-06 15:01:12]
You are 100 times more likely to catch a cold on a flight than an average person!
 
Pe@rson
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RE: FR 3rd 3/4 Profit: Increased

Mon Feb 06, 2006 10:47 pm

Quoting Cornish (Reply 12):
I take it maths wasn't your strong point at university or school then James ?

Try again !

You're right - it wasn't. I'm useless at maths. So, increased 31% of 18%.
"Everyone writing for the Telegraph knows that the way to grab eyeballs is with Ryanair and/or sex."
 
7LBAC111
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RE: FR 3rd 3/4 Profit: Increased

Mon Feb 06, 2006 10:49 pm

Quoting Pe@rson (Reply 11):
No comment about the delight of refreshments in the 'goldern era'?

None whatsoever.

However, somewhat relevant is that 7L likely failed because they tried to be all things to all men. Lowcost for the back of the plane, and full frills at the pointy end. Somewhat like BD are doing now.

FR has proved you need one fixed business model, and no deviation from it whatsoever to succeed.

7L
Debate is what you put on de hook when you want to catch de fish.
 
cornish
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RE: FR 3rd 3/4 Profit: Increased

Mon Feb 06, 2006 10:55 pm

Quoting 7LBAC111 (Reply 15):
However, somewhat relevant is that 7L likely failed because they tried to be all things to all men.

You failed because you tried to be all things to all men ??  Wow!

Quoting 7LBAC111 (Reply 15):
FR has proved you need one fixed business model, and no deviation from it whatsoever to succeed

Getting serious now.... absolutely right. Complete focus on the correct business strategy is required. Chasing different strategies and diluting the model and product just doesn't work - its why I don't think (and if they do then they're damn stupid) FR will ever go long haul in the near term - well if they do, then ONLY from setting up a separate company to do it.
Just when I thought I could see light at the end of the tunnel, it was some B*****d with a torch bringing me more work
 
Pe@rson
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RE: FR 3rd 3/4 Profit: Increased

Mon Feb 06, 2006 10:59 pm

BW - as a Southern Irish bloke, do you know how DUB-ORK is performing with FR?
"Everyone writing for the Telegraph knows that the way to grab eyeballs is with Ryanair and/or sex."
 
BestWestern
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RE: FR 3rd 3/4 Profit: Increased

Mon Feb 06, 2006 11:02 pm

Quoting Cornish (Reply 16):
Chasing different strategies and diluting the model and product just doesn't work

I cant think of any UK based EMA HQ'd carrier that follows that concept.


There is too much capacity this winter in the UK short haul market.
You are 100 times more likely to catch a cold on a flight than an average person!
 
7LBAC111
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RE: FR 3rd 3/4 Profit: Increased

Mon Feb 06, 2006 11:21 pm

Quoting Cornish (Reply 16):
You failed because you tried to be all things to all men ??

I did. Haha. What I of course mean't is that AB Airlines (formarly IATA code 7L) tried to do what BD are doing now. And they aren't around anymore. As BW puts it, the overcapacity this winter will inevitabley lead to a casulaty.

Bets please on BD or WW?

7L
Debate is what you put on de hook when you want to catch de fish.
 
BestWestern
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RE: FR 3rd 3/4 Profit: Increased

Mon Feb 06, 2006 11:31 pm

Quoting 7LBAC111 (Reply 19):
Bets please on BD or WW?

Obviously Euromanx and Airwales are gonners. I get flamed every time I say this, but there is too much competition in the midlands (CVT, BHX, EMA, LPL, MAN, LBA, DSA) - one carrier focused on these markets is too weak. For me add 1+1 to a Jet... or a spotted M...
You are 100 times more likely to catch a cold on a flight than an average person!
 
smokeyrosco
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RE: FR 3rd 3/4 Profit: Increased

Tue Feb 07, 2006 12:57 am

Quoting Pe@rson (Reply 6):
(remembering that it doesn't have cars itself but rather has a deal with a Hertz) was somewhere between £30 and £40 million per year,

It was €35 million profit for renting hertz cars in 2004 so no doubt it's more now, I'm almost sure it was an Avis advert too trying to point out how ryanair was ripping people. I'd love to know exactly how little of an impact that had on avis sales?
John Hancock
 
7LBAC111
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RE: FR 3rd 3/4 Profit: Increased

Tue Feb 07, 2006 1:25 am

Quoting BestWestern (Reply 20):
For me add 1+1 to a Jet... or a spotted M...

I can understand the Jet2 reference, but are they really financially weak? Or do you mean for acquisition? Likewise - are Monarch struggling?

7L
Debate is what you put on de hook when you want to catch de fish.