RYANAIR put itself on course for a full-year profit haul of more than £40 million yesterday, beating a previous prediction of break-even, as the no-frills carrier continues to cash in on the global recession.
Drawing parallels with "Lidl, Aldi, Ikea and McDonalds", Ryanair chief executive Michael O'Leary said the airline was benefiting from the consumer's "focus on price".
"The longer and deeper this recession, the better it will be for the lowest-cost
producers in every sector," he said.
His upbeat outlook came despite the group tumbling to a quarterly loss of 101.5 million (£90.3m) from profits of 35m a year earlier as it felt the impact of last year's oil price bubble.
During the final three months of 2008 – Ryanair's financial third quarter – fuel costs at the airline rose by 71 per cent, equating to an additional 328m.
The group said its decision not to "hedge" – or effectively fix – fuel costs in the fourth quarter of its financial year had paid off as prices continue to fall sharply.
Dublin-based Ryanair, which has key Scottish bases at Edinburgh and Prestwick airports, now expects to report an annual surplus of between 50m and 80m, having previously forecast that it would only break even. It also expects to return to "substantial profitability" in the following financial year.
The prediction follows an increase in profit forecasts last month by smaller rival EasyJet, while flag-carriers British Airways and Air France-KLM both issued profit warnings.
O'Leary described Ryanair's third-quarter performance as "disappointing", but said passenger traffic was rising as cash-strapped consumers switched to lower cost travel.
During the three months to 31 December, Ryanair's passenger numbers rose 13 per cent to 14 million.
The carrier is also benefiting from strong "ancillary" sales, which rose by almost a fifth in the third quarter to 132m and now account for 22 per cent of group revenues.
It is trialling an on-board mobile phone service from the end of this month on 20 Dublin-based aircraft, which it hopes to extend to some 40 planes by the summer.
"We expect initial revenues to be small, but believe that in-flight communication will be a strong source of ancillary revenue growth in future years," the airline added.
Ryanair expects that fares will fall by some 10 per cent next year, or more if the recession deepens.
However, it does not expect to give precise profits guidance for 2009-10 until the fare outlook becomes clearer.
The airline – Europe's biggest low-cost operator – also confirmed that it was unlikely to make another offer for Aer Lingus after it withdrew its bid last month following a takeover rejection by the Irish government.
