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Ryanair reports disappointing 3QFY2011 results, Air Arabia shares down 6%

Analysis

Europe's largest LCC Ryanair reported a disappointing loss in 3QFY2011 but the airline is forecasting a stronger final quarter with results towards the upper end of its forecast range. The carrier made a EUR300,000 operating loss and a net loss of EUR10 million, on revenue of EUR746 million.

Summary
  • Ryanair reports a disappointing loss in 3QFY2011, with an operating loss of EUR300,000 and a net loss of EUR10 million.
  • The loss is attributed to nearly 3000 flight cancellations, despite better revenue performance and higher load factors.
  • Ryanair anticipates a stronger final quarter with results towards the upper end of its forecast range, benefiting from new routes, competitor fuel surcharges, and lower unit costs.
  • Ryanair's full-year net profit guidance is expected to be between EUR380-400 million.
  • Shares in Ryanair were up 0.3% at the close of trading.
  • Air Arabia, another LCC, saw its stock fall 6.7% on the same day.

Nearly 3000 flight cancellations hurt the carrier's results in the quarter, despite better revenue performance and higher load factors.

Ryanair anticipates traffic and average fares to continue to benefit from a better mix of new routes and bases and competitor fuel surcharges and lower overall unit costs thanks to better aircraft utilisation. Ryanair's full year net profit guidance is for EUR380-400 million. For more analysis on Ryanair's latest financial results see: Ryanair reports "disappointing" 3Q EUR10 million loss; fares increase 15%. Full year profit expected

Shares in Ryanair were up 0.3% at the close of trading.

Air Arabia saw its stock fall 6.7% on Monday. The carrier has a hub in Alexandria, operated through a JV with local Travco Group, the Middle East's largest travel and hospitality group.

Selected LCCs' daily share price movements (% change): 31-Jan-2011

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