Ryanair - 6

[anna_list]

First quarter results

1st Quarter Results - London Stock Exchange
Profit after tax of € 136.5 M excludes a further €13.5m write down on the Aer Lingus shares (total write down on Aer Lingus has now reached €327 M!).

Full year yield decline expected to be "at or slightly more than minus 20%", "unit costs (excluding fuel) to fall by approx. 5%"

Full year guidance "towards the lower end of the €200m to €300m range."

A few other interesting points from the full results report:
* Gross cash increased in the quarter by €221.9M to €2,500.1M
*Long term debt, net of repayments, increased by €206.5m to €2,604.9m during the quarter
* €65.6m raised from the sale of three Boeing 737-800 aircraft
* It would appear that the plan is still to increase the fleet size (net of planned disposals) to 292 aircraft by March 31, 2012. That's an increase of 93 aircraft over 32 months.

[Whiskey Papa]

Ryanair blames fuel price fall for increase in profits!

Also passenger numbers increased - a stark contrast to BA!

BBC NEWS | Business | Fuel price fall bolsters Ryanair

WP

[racedo]

A decent set of Q1 results given what is happening within the market place.

Still managing to obtain decent prices for old aircraft of approx €22 M ($30-31M) which is US$ terms is likely well above original purchase price, though given these sales probably agreed 6 months to a year ago they probably not sustainable.

[befree]

Ryanair is taking less from each pax even in a qtr that has easter when the same year before did not. The low income per pax show how those who can chose are going with better carriers. After the summer peak the airline will find it impossible to keep load factors without even greater discounts on ticket prices. They forecast 200m-300m euro profit for the year but that is very dependant ok keeping enougth pax paying over 30 euros.

This year they cannot blame a high fuel cost for the lack of profits. Big losses will come in the winter.

[racedo]

Ryanair is taking less from each pax even in a qtr that has easter when the same year before did not. The low income per pax show how those who can chose are going with better carriers. After the summer peak the airline will find it impossible to keep load factors without even greater discounts on ticket prices. They forecast 200m-300m euro profit for the year but that is very dependant ok keeping enougth pax paying over 30 euros.

This year they cannot blame a high fuel cost for the lack of profits. Big losses will come in the winter.

http://www.pprune.org/4909203-post4319.html

Guess they won't need to be admitting 2009/10 will be loss making just yet

As for the going with better carriers ? Please do tell which one ?

Lufthansa: Airline industry in "worst crisis in its history" | Top News

LH doesn't think so as Passengers numbers down 5% in the 1st half year.

BA passenger numbers going nowhere in Europe

Easyjet Passenger numbers year on year to end of June were flat v 2008 and that excludes Jan 2008 of GB Airways numbers.

[ayroplain]

Printing Boarding Passes

Originally Posted by davidjohnson6

I'm interested as to how your friend manages to fly so much for under £20 - assuming he has a Mon-Fri job and flies mainly at weekends.

He's retired, travels midweek, always ahead of the game, has loadsa dosh and never paid full price for anything in his life

Thanks super737. When he hears that good news I can guarantee he won't even spend the £50 on a new printer!!

[MUFC_fan]

But it will operate only four fewer planes than it did last winter.

I love that comment...

Any airport in the UK would LOVE to have four extra aircraft!

[befree]

from the airline

As a result we expect Q2 yields will be significantly lower than last year, at or even slightly above the minus 15% to 20% range previously guided. Based on this yield performance in H1 we expect the full year yield decline will be at or slightly more than minus 20% and accordingly, our full year net profit will be towards the lower end of the €200m to €300m range, previously guided.

Many airlines are carrying less pax but FR are carrying more but at a lot lower fare. If fares are 20% lower then you need 25% more pax to get the same income. It costs more to carry 25% more pax. The airline has gone well below the optimal price point to make money. It need to fund a few billion euros of new planes but has static income. As a business it is easyjet that has got things right and kept growth low so that fares are not undermined.

[racedo]

Many airlines are carrying less pax but FR are carrying more but at a lot lower fare. If fares are 20% lower then you need 25% more pax to get the same income. It costs more to carry 25% more pax. The airline has gone well below the optimal price point to make money. It need to fund a few billion euros of new planes but has static income. As a business it is easyjet that has got things right and kept growth low so that fares are not undermined.

Don't need to drive income hard when your costs are falling.

As for needing the income for new planes well think the €200 plus million cash generated in Q1 goes towards that quite nicely.

[befree]

The stock market is marking ryanair down 9% at the moment.
Cash always flow in during the summer but will go back out in the winter.

It is cashflow that breaks firms not profits. the orders for new planes leads to billions of cash flowing out during the next 5 years. They may not have enough cash to pay and the credit will dry up as the cash pile drops.

The decline in ryanair will be slow and painful. Cost cutting will hurt load factors. When they lose the last minute bookings the profit is dead.

[MUFC_fan]

As long as they weren't four Ryanair aircraft......

CEOs at many UK airport will disagree with you there.

It is cashflow that breaks firms not profits.

Sort of true. But remember, you can have a £1bn coming in a day but it you are spending £1.5bn then it isn't going to work. You can have £10bn in the bank but it will only last you 20 months.

the orders for new planes leads to billions of cash flowing out during the next 5 years. They may not have enough cash to pay and the credit will dry up as the cash pile drops.

I thought Ryanair bought the aircraft themselves at very low prices from Boeing, sold them to leasing firms, made a profit through them and then leased them back? Maybe that doesn't happen any more I am not sure. A lot like what BT did.

The decline in ryanair will be slow and painful.

I am pretty sure you cannot say things like that - people study hard at Uni and are given the privilege of making quotes like that. It may be your opinion but you cannot state it like that. How are you in the know of that anyway?

Cost cutting will hurt load factors.

How will Ryanair's cost cutting hurt load factors?! They have been reducing costs for years and their load factors have stayed pretty stagnant and passenger numbers have risen!

When they lose the last minute bookings the profit is dead.

What has/will change in the market for them to lose these bookings?

Please note:

• I do not work for Ryanair
• I benefit nothing from the airline (except cheap flights!)
• I am fair to Ryanair where credit is due but give me BA anyday

I just get annoyed when people, who maybe have never even flown with the airline, make comments that, whether they have flown with them or not, are quite ridiculous and I would go as far to say stupid (quotes 1 and 4).

[racedo]

The stock market is marking ryanair down 9% at the moment.
Cash always flow in during the summer but will go back out in the winter.

It is cashflow that breaks firms not profits. the orders for new planes leads to billions of cash flowing out during the next 5 years. They may not have enough cash to pay and the credit will dry up as the cash pile drops.

The decline in ryanair will be slow and painful. Cost cutting will hurt load factors. When they lose the last minute bookings the profit is dead.

I guess €2.6 Billion in cash is just a problem Ryanair will have to struggle with.

As the reported results are only to end of June then guess the cash will still just have to pile in further over the summer YET AGAIN.

As for the orders for new planes they are already financed at pretty cheap rates with ExIm bank so having enough cash is not going to be a problem then is it ? Let face it do you lend money to an airline with continual good cashflows or to one that is struggling and burning cash.

If cost cutting is hurting load factors then the increase of 2% year on year in load factors and the 5% cut in costs suggests yet again your attempt in clutching at straws fails.

[eastern wiseguy]

What has/will change in the market for them to lose these bookings?

The downfall of things like the Celtic Tiger. Eastern europeans returning home.The irritating things involved in flying these days ....from security carp to charges out of all proportion to the service received(credit and debit charges for example). The fact(as another poster put it) everyone from Essex has been to Lubeck as many times as they need. Not least the fact that my employer tells me that pax figures have fallen hugely over the past year.Oh and a recession with folks having less discretionary disposable income.

I am sure that more will be added.

the increase of 2% year on year in load factors and the 5% cut in costs

And profits are being marked down.....so not really stopping the "rot" merely slowing the descent.

[MUFC_fan]

The downfall of things like the Celtic Tiger. Eastern europeans returning home.The irritating things involved in flying these days ....from security carp to charges out of all proportion to the service received(credit and debit charges for example). The fact(as another poster put it) everyone from Essex has been to Lubeck as many times as they need. Not least the fact that my employer tells me that pax figures have fallen hugely over the past year.Oh and a recession with folks having less discretionary disposable income.

I am sure that more will be added.

But how will that reduce LATE bookings specifically?

[eastern wiseguy]

It will have the effect of reducing bookings period.Last minute bookings are generally the most expensive......and the recession/discretionary spend will see to that.

[davidjohnson6]

People seem to be forgetting one big thing - recessions do not last forever.

Every airline is hurting right now, and all are seeing profits weaker than they would like. When the recession ends, people will start spending more freely again.

[MUFC_fan]

Well said davidjohnson6.

Also - since when have Ryanair's passenger numbers been falling?!

[racedo]

The downfall of things like the Celtic Tiger. Eastern europeans returning home...........Oh and a recession with folks having less discretionary disposable income.

In a recession people are more likely to look for options that are cheaper as LH Board Director was stating last week.

Not sure Celtic Tiger and Polish immigration that has much relevance to internal flights within Spain or Italy does it ?

Flights numbers have reduced considerably from Ireland in last year and Poland but the prices have gone up.
Italy the focus for much of Ryanair and easyJet’s expansion in last 12 months; Spanish flights up over 20% | anna.aero

FR has expanded number of departures in Italy and Spain by close to 50% within last year .

And profits are being marked down.....so not really stopping the "rot" merely slowing the descent.

How are they being marked down if made more money that last year.

Guidance on full year profit is historically conservative with Ryanair and then they over deliver. Its why puzzled about decline in share price because he is stating he will lose money in last half of year which not sure even he believes..

[WHBM]

Originally Posted by MUFC_fan

When they lose the last minute bookings the profit is dead.

What has/will change in the market for them to lose these bookings?

The people like me, travelling a lot, who pay over £200 return to Ireland or Prestwick, booking the day before and travelling on business. I do it because Stansted is a more convenient place than Heathrow to get to for a Cork flight, or because I am going to Ayr and Prestwick offers an advantage over Glasgow. This is quite a lot of their higher-revenue demand.

Do not think that Ryanair built up their profits from people paying £1. Obviously they did not. They got it from people like me and similar.

However this advantage is marginal, and Ryanair are steadily whittling that away. Because we get the same standad of service (see above) as those paying lower fares. If we are going to be messed about with baggage fees and similar, because I decide to take two laptops, regardless of whether I can claim the fees back on expenses, that is a step towards the competition. If we continue to be laughed at when attending business meetings because we travelled Ryanair and get asked if we had to travel standing up, or had to pay for the toilet, that's a negative. If, having spent £220 return STN-DUB, we get patronised by the proprietor of the airline who tells the media "what else do they expect for their £1", that's another negative.

07.30 Monday morning out of Stansted there are a lot of people in business suits on Ryanair. I doubt any of them paid anything like the low headine prices - yield management seems to be something Ryanair do well. That's the market to lose.

[racedo]

Do not think that Ryanair built up their profits from people paying £1. Obviously they did not. They got it from people like me and similar.

They do make it from you and similar BUT don't discount the 1 pound fare because these people also go to places for longer and hire a car / use the Ryanair bus / eat of the plane etc etc. The profit may be smaller but as Walmart show again and again a small profit from many customers is still a profit worth having, just you need to ensure the correct mix as BA is showing that the desertion of business class passengers is crashing profits and it doesn't have anything to replace them with.