Ireland-based budget airline Ryanair Holdings PLC (RYA.LN) said
Monday that it swung to a net loss in its fiscal third quarter as a
drop in average fares and a weaker Sterling weighed but noted that
bookings have picked up recently, which should ensure that
full-year guidance is met.
The company lowered its full-year net profit guidance last
quarter to EUR500 million-EUR520 million as lower average fares hit
its winter period but said Monday it was confident it would still
hit that target.
"We reacted quickly to last autumn's weakness with a range of
lower fares, seat promotions, and recently increased advertising
and marketing spending," the company said. "As a result, forward
bookings in the fourth quarter and into FY15 are running
significantly ahead of last year, albeit at weaker yields."
Ryanair, Europe's largest discount airline, reported a
third-quarter net loss of EUR35.2 million, down from a profit of
EUR18.1 million a year earlier. Revenue was little changed at
EUR964.4 million.
Income from initiatives such as reserved seating, so-called
"ancillary revenue," grew 13% and helped offset lower fares, the
company added.
The company is changing its business model as it faces
increasing competition from fast-growing carriers such as Norwegian
Air Shuttle ASA (NAS.OS) and Hungary's Wizz Air as well as local
rival easyJet PLC (EZJ.LN) and Vueling, the Barcelona-based unit of
International Consolidated Airlines Group (IAG.LN).
After years of focusing on cost, Ryanair is having to look
elsewhere to protect and grow market share. The discount carrier is
going after business travelers with allocated seating, flexible
ticketing and flights to primary airports. It is also overhauling
its website and has cut baggage fees while its abrasive chief
executive, Michael O'Leary, is taking on less public exposure in a
recent management shuffle.
Write to Dominic Chopping at dominic.chopping@wsj.com
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