Ryanair (LON:RYA) Improves Passenger Growth Forecasts, Profits Go Up

The biggest budget airline carrier of Europe, Ryanair Holdings Plc (LON:RYA) has increased their long-term traffic forecasts by an impressive 10 percent.

Based out of Dublin in Ireland, the business says they will be flying more than 200 million people every year within March 2024. This was 180 in the last forecast. For this full year, the carrier is expected to carry 119 million passengers, which is a 12 percent growth over last year.

Many analysts were taken by surprise with this prediction as Ryanair was expected to be hit hard after Brexit. Its revenues were expected to fall because of a falling pound. And in fact, after UK voted to leave the European Union, Ryanair had actually reduced its growth projections for 2017 from 12 percent to 5 percent.

Ryanair Profits Increase By 7 Percent

But the airline carrier managed quite well and announced a 7 percent increase in profits for the first half of the year. Between April and September, the business made a profit of £1.04 billion or $1.29 billion even as the company release said it has been “a strong first half”. The market reacted positively to this news with the Ryanair stock going up to €13.40, up 4.92 percent.

However, it is still less than a projection made earlier in the year. Only last month, the business had reduced their profit estimation for the full year, saying that it is likely to be between €1.3 billion and €1.35 billion, down by 5 percent than a projection made earlier.

The Second Half Results May Not Be As Good

A warning has been issued as well. Ryanair issued a statement saying that the Brexit uncertainties and weaker air fares are likely to be dominant features in the second half. It already expects revenues from fares to fall in the second half of the financial year by 13% to 15%. But assuring investors, the release said, Ryanair remains positive about the company’s long-term growths “despite the uncertainty of Brexit”.

To deal with Brexit, Ryanair (LON:RYA) has decided to reduce fare prices because the environment is still bearish. Michael O’Leary, who is the Chief Executive, feels that this should encourage more people to travel. They want the aircraft’s near full capacity.

O’Leary also announced that Ryanair will get 40 new aircraft’s every year for the next eight years. This will help the business strengthen its presence in Europe and keep growing.