Ryanair H1 Profits Rise 7% To €1,168m (on 10% lower fares)

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07-Nov-2016 €550m Share Buyback Approved By Airline Board

Ryanair, Europe's No. 1 airline, today (Nov 7) reported a 7% increase in H1 profits to €1,168m as AGB and lower fares delivered 12% traffic growth to 65m customers and a 2% jump in load factor to 95%. Ave. fares fell 10% to €50, however H1 unit costs also fell by 10% (ex-fuel down 5%).

H1 Results (IFRS)

Sept 30, 2015

Sept 30, 2016

% Change

Customers (m)




Revenue (m)




Profit after Tax (m)*




Net Margin*




Basic EPS*




*excludes exceptional accounting gain of €317.5m on sale of Aer Lingus shareholding in Sept16.

Ryanair's CEO, Michael O'Leary, said:

"We are pleased to report this 7% increase in H1 profits, which was a creditable performance in difficult market conditions due to repeated ATC strikes, terror events, and the adverse economic impact of the Brexit vote in June which saw Sterling weaken materially over the peak summer period. We responded by accelerating our Always Getting Better ("AGB") customer experience programme, and using our lower costs base to stimulate stronger forward bookings with lower fares. Notable highlights of the half year include:

  • Traffic grew 12% to 65m (LF up 2% to 95%)
  • fares fell 10% to €50
  • Unit costs cut 10%
  • 73 new routes and 6 bases opened
  • 21 new B737-800s delivered
  • 7th Share Buyback (€886m) completed in June
  • com became the world's No. 1 airline website

Traffic Growth, New Routes and Bases:

Our unique combination of AGB and lower fares helped to stimulate stronger forward bookings, higher load factors and 12% traffic growth to 65m customers. This growth was spread widely across Europe as we opened 73 new routes and 6 new bases. This winter we take delivery of 31 new B737-800s and will open 6 more bases in Bucharest, Bournemouth, Hamburg, Nuremberg, Prague and Vilnius. Our base in Berlin (SXF) will grow from 5 to 9 aircraft, while Luxemburg will become our 33rd served country in November. Our S17 schedule (which was launched 2 weeks earlier than last year) will see us add over 80 new routes and a new 2 aircraft base at Frankfurt am Main airport (opens in late March) as we respond to growing demand in Germany from business and leisure customers for Ryanair's low fares and AGB services.

During H1, we've observed a growing trend of competitors closing bases and routes where they are unable to compete with Ryanair's lower fares and we expect this trend to continue, especially in markets such as Germany, Italy, Spain and Belgium where significant restructuring of loss making operators (even at lower oil prices) continues. This trend is encouraging more primary airports to incentivise Ryanair to grow while their incumbents are cutting. The shift in Ryanair's growth from secondary to primary airports continues, and at the end of 2016 for the first time Ryanair will operate to a majority of primary (105) rather than secondary (95) airports.

We welcome the Italian Government's decision to reverse the €2.50 Municipal Tax increase from Oct 2016, which enabled us to reverse base closures and capacity cuts in Italy. Ryanair responded by adding 3m seat capacity into the Italian market for 2017. Sadly the recent Brexit vote will result in pivoting some of our planned 2017 growth away from the UK, due to weaker Sterling, expected slower GDP growth and market uncertainty. We will reduce our planned UK growth from 12% to approx. 5% in 2017. "AGB" Customer Experience:

Our AGB program continues to win millions of new customers to Ryanair. In July we became the first airline ever to carry over 11m international customers in a calendar month. Our customers are enjoying even lower fares and flying from more primary airports on our brand new aircraft, with new Boeing Sky Interiors, offering more leg room and super comfortable seats. The uptake of our Business Plus and Leisure Plus products is rising. We soft launched Ryanair Rooms in Oct and continue to improve both the mobile app and "My Ryanair" membership which allows customers to make faster bookings and obtain more benefits.

In Q3 we will make membership of "My Ryanair" automatic for all customer bookings so that we can tailor services and improve offers for each customer. Over the coming months our customers can look forward to new features including automatic check in and a wider choice of accommodation on the Ryanair Rooms platform in addition to greater fare savings.

After a poor start in Q1 (due to adverse weather and a succession of unjustified ATC strikes) our industry leading on-time performance improved in Q2 to almost 90%. We continue our campaign to persuade the European Commission to take action to ameliorate the effects of national ATC strikes by keeping Europe's skies open even when national ATC providers are on strike.
























Lower Costs & Hedging:

Ryanair delivered a unit cost saving of 10% in H1. Despite a 12% jump in traffic, our fuel bill fell by 8% (a 17% unit saving) due to the hedges we put in place 12 months ago. Ex-fuel unit costs fell 5% as we took delivery of new lower cost aircraft (due to our currency hedges), cheaper financing, more competitive growth incentives from airports, and we also benefited from weaker Sterling and higher load factors.

Since the June Brexit vote, Sterling has fallen 18% against the euro. This was primarily responsible for the recent €75m reduction in FY guidance from a midpoint of €1.4bn to €1.325bn. We have put Sterling hedges in place to end March 2017 to protect our yields from any further Sterling weakness.

For H2 our fuel is 95% hedged at approx. $59bbl. We have also increased our FY18 fuel hedge cover to 85% at approx. $49bbl which (allowing for volume growth) will deliver further fuel savings of c. €140m in FY18.


The uncertainty over Brexit, and the final outcome of the UK's departure negotiations with the European Union, will continue to overhang our business for FY18. We expect to see weaker Sterling and slower economic growth in both the UK (approx. 26% of our revenues) and Europe. We have responded by reducing our planned UK growth in 2017 from 12% to approx. 5%, and switched this capacity to accelerate growth in markets such as Italy (where the Govt have cut taxes), Germany (where incumbent carriers continue to restructure) and other markets such as Belgium, where competitors are closing routes and bases. We hope that the UK will remain a member of Europe's "Open Skies" system, but until the final outcome of Brexit has been determined, we will continue to adapt to changing circumstances in the best interests of our customers, our people and our shareholders.

Ryanair Labs & Ancillaries

We continue to invest heavily in Ryanair Labs which is transforming our digital platform to make it easier for customers to interact with Ryanair and book our lowest fares and ancillary services. Ryanair.com has recently overtaken Southwest Airlines to become the world's largest airline website. Our mobile app was the 8th largest UK travel app (by usage) in Sept 2016, well ahead of our UK airline competitors easyJet (No. 20) and BA (No. 37). 93% of all customers are now booking directly on Ryanair.com and we expect membership of "My Ryanair" will significantly increase from 15m in Sept to over 25m by end-2017.

Ryanair Labs has delivered a significant upward shift in web visits, app bookings, as well as ancillary services by boosting the sales of reserved seats, Business/Leisure Plus products and fast track services which customers can buy at discounted rates during the booking process. As a direct result of this increased customer demand for travel related services, we are raising our medium term guidance for ancillary sales from 20% to 30% of revenues, over the next 4 years to March 2020.

Balance Sheet & Shareholder Returns:

Ryanair's balance sheet remains one of the strongest in the airline industry. At the end of Sept. we had net cash of €77m despite having spent over €600m on CAPEX, €200m on debt repayments and €468m on share buybacks during the half year. We completed our 7th share buyback in June at a cost of €886m, bringing our total returns to shareholders since 2008 to over €4.2bn. We will continue to return surplus funds to shareholders subject to market conditions as long as we remain profitable, cash generative, and can fund our CAPEX and other operational requirements.

With this in mind, the Board of Ryanair have authorised a further share buyback of up to €550m over the 4 month period from Nov 2016 to Feb 2017. We expect to split this 50/50 between ADR's and ordinary shares, which will ensure we continue to comfortably exceed our 50% EU ownership requirement.


We remain cautious in our outlook for FY17. We have delivered a strong first half but weaker air fares and Brexit uncertainty will be the dominant features of H2. Having hedged both our fuel and Sterling exposures, we remain comfortable with our revised full year guidance of €1.30bn to €1.35bn. However, with limited Q4 visibility, and the absence of Easter from Q4, we expect fares will continue to fall (H2 fares are guided at c. -13% to -15%), so this guidance is heavily dependent upon there being no unexpected adverse declines in Q4 airfares. We expect FY unit costs will fall by approx. 3% this year (we previously guided -1%). H2 fuel will deliver significant savings as we are 95% hedged at $59pbl but these savings will be passed on in lower fares.

We expect to carry just over 119m customers in FY17 and this stronger growth requires us to raise our long term traffic forecast by over 10% from 180m to over 200m customers p.a. by March 2024. Despite the uncertainty of Brexit, Ryanair believes that we can deliver profitable growth across Europe by controlling costs, lowering airfares, and maximising load factors in a manner that will most benefit our customers, our people and our shareholders."