Ryanair today (4 Feb.) reported a Q3 net loss of €20m (excl. Lauda). Strong traffic growth (+8%) to 33m was offset by a 6% decline in ave. fares due to excess winter capacity in Europe. Stronger ancillary revenue growth (+26%) was offset by higher fuel, staff and EU261 costs.
| Q3 Results (IFRS)* |
Dec. 31, 2017 |
Dec. 31, 2018 |
% Change |
| Guests |
30.4m |
32.7m |
+8% |
| Load Factor |
96% |
96% |
0% |
| Revenue |
€1.41bn |
€1.53bn |
+9% |
| PAT/ (Net Loss) |
€105.6m |
(€19.6m) |
|
* excl. €46.5m exceptional Q3 FY19 Lauda loss
Ryanair’s Michael O’Leary said:
“While a €20m loss in Q3 was disappointing, we take comfort that this was entirely due to weaker than expected air fares so our customers are enjoying record low prices, which is good for current and future traffic growth. While ancillary revenues performed strongly, up 26% in Q3, this was offset by higher fuel, staff and EU261 costs.”
Q3 highlights include:
- Traffic grew 8% to 33m (LF unchanged at 96%)
- Ave. fares fell 6% to under €30
- Ancillary revenue rose 26% to €557m
- More union progress – 20 Jan. Spanish Cabin Crew agreement
- Lauda holding increased to 100%
- UK AOC granted in Dec.
Revenue
Q3 revenue increased 9% to €1.53bn, up 1% per guest, due to a strong performance in ancillary revenue and increased traffic stimulated by a 6% decline in average fares to under €30 due to excess short-haul capacity in Europe. Ryanair Labs continues to drive ancillary revenue. In Q3 priority boarding and reserved seating grew strongly. A transformational improvement of our digital platform is underway (website, app & 3rd party ancillary plug-ins) and will be completed before year-end. This will further improve personalisation, and triple capacity, as we grow to 200m guests p.a. and welcome over 1bn platform visits each year.
Cost Leadership
Ryanair has the lowest unit costs of any EU airline and this gap is widening. We will take delivery of our first 5x B737 MAX “gamechanger” aircraft from April. These aircraft have 4% more seats, are 16% more fuel efficient, have 40% lower noise emissions and are hedged at an average €/$ rate of $1.24 out to FY24. They will drive unit cost efficiencies over the next 5 years. As consolidation continues and weaker European airlines fail (or sell), airports are increasingly keen to attract Ryanair’s dependable, efficient (high load factor) traffic growth. FY19 is a year of investment in our people, our systems and our business as we prepare to grow to 200m guests p.a. by 2024. In Q3 ex-fuel unit costs increased by 6%. This includes higher staff costs, including the 20% pilot pay increases, investment in engineering headcount, pilot/cabin crew training, and elevated EU261 costs due to the high number of ATC staff shortages/disruptions in FY19. We have extended our fuel hedges and are 90% hedged for FY20 at c.$71bbl and 13% hedged for Q1 FY21 at c.$63bbl.
Balance Sheet
The Group’s balance sheet (BBB+ rated) remains one of the strongest in the industry with €2.2bn gross cash and 93% of our fleet owned – 60% of which is unencumbered. In the first 9 months of FY19 Ryanair generated almost €560m net cash from operations, spent €1.2bn on capex (primarily aircraft, simulators, engines, hangars and spare parts), returned €560m to shareholders via share buybacks, and repaid over €230m debt. As a result, net debt increased to €1.5bn at quarter end.
Lauda
In December, Ryanair acquired the remaining 25% of Laudamotion. This Austrian airline will carry just over 4m customers in its first (start up) year, but was heavily loss making, mainly due to the very late release of S.18 schedules, low promotional fares, expensive aircraft leases and unhedged fuel. Due to recent improvements in schedules, fares and costs, the exceptional year 1 start-up loss has been reduced from an expected €150m to approx. €140m. Lauda is now gearing up for its second year with an increased fleet of 25 aircraft (from 19 in prior year), traffic growth to 6m guests, lower cost fuel hedges, and we expect losses to narrow substantially to between €50m and breakeven depending on S.19 peak season yields. By year 3 Lauda is on track to grow to over 7.5m customers and profitability.
Competition & Consolidation
Higher oil prices and lower fares have over the past 4 months seen a wave of EU airline failures including Primera (UK & Spain), Small Planet and Azur (Ger), Sky Works (Swi), VLM (Bel), Cobalt (Cyprus) and Cello (UK). In addition, other bigger airlines like Wow (Ice), Flybe (UK), and Germania (Ger) are urgently seeking buyers or, like Norwegian, refinancing just to survive.
Other airlines have also cut or closed bases in response to lower fares and higher fuel costs. Ryanair closed unprofitable bases in Bremen & Eindhoven and we cut aircraft numbers in Niederrhein and Hahn. Norwegian have closed multiple bases, many where they compete with Ryanair, including Rome, Las Palmas, Palma, Tenerife, Edinburgh & Belfast, and will cut their Dublin base from 6 to 1 aircraft in October. Wizz (Poznan), Lufthansa (Dusseldorf) and EasyJet (Oporto) have also announced base cuts and/or closures in recent months. We expect more closures and airline failures in 2019 due to overcapacity in the European market, which is causing continued fare weakness.
Brexit
The risk of a “no deal” Brexit remains worryingly high. While we hope that common sense will prevail, and lead to either a delay in Brexit, or agreement on the 21 month transition deal currently on the table, we have taken all necessary steps to protect Ryanair’s business in a no-deal environment.
We have now obtained a UK AOC to protect our 3 domestic UK routes, and we will place restrictions on the voting rights and share sales of non-EU shareholders for a period of time (in the event of a hard Brexit) to ensure that Ryanair remains at all times an EU owned and EU controlled airline, even if the UK exits the EU without a deal.
Guidance (excl. Lauda)
As announced on 18 Jan., Ryanair’s FY19 profit guidance will be in a range of €1.0bn to €1.1bn due to:
- Lower winter fares, which are expected to fall 7% (H2) (compared to -2% originally forecast);
- Stronger traffic growth, up 9% to 142m;
- Stronger ancillary sales as more customers choose lower cost optional services; and
- Slightly better than expected H2 unit cost performance, mainly lower unhedged oil prices.
This guidance excludes (exceptional) start-up losses in Lauda, which have been cut from €150m to €140m primarily on the back of better than expected unit cost performance during the winter period.
While we have reasonable visibility of our Q4 bookings, we cannot rule out further cuts to air fares and/or slightly lower full year guidance especially if there are unexpected Brexit and/or security developments which adversely impact fares for close-in bookings between now and the end of March.
We do not share the recent optimistic outlook of some competitors that Summer 2019 airfares will rise. In the absence of further EU airline failures, and because of the recent fall in oil prices (which allows loss making unhedged competitors to survive longer), we expect excess short haul capacity to continue through 2019, which will we believe lead to a weaker – not stronger – fare environment.
Ryanair will continue to be load factor active / price passive in this market, which we expect will lead to lower fares for our customers, robust traffic growth and more casualties among already loss making competitors before the year end.”
Group Structure
Over the next 12 months Ryanair Holdings Plc will move to a group structure not dissimilar to that of IAG. A small senior management team will oversee the development of 4 airline subsidiaries; Ryanair DAC, Laudamotion, Ryanair Sun and Ryanair UK, each with their own CEOs and management teams. Holdings will focus upon efficient capital allocation, cost reductions, aircraft acquisitions and small scale M&A opportunities.
To lead this group structure Michael O’Leary will become Group CEO, a role in which he will concentrate on the development of the group. A replacement CEO of Ryanair DAC, who will work alongside the CEOs of Laudamotion and Ryanair Sun, will be appointed later this year. The Group CEO will be assisted in Holdings by small group legal and group finance teams. As we expand the Lauda Airbus fleet and take delivery of over 200 B737 Max aircraft, we believe this group structure will deliver cost and operating efficiencies, while enabling the group to look at other small scale M&A opportunities like the successful development of Lauda.
Board Succession
Having agreed this group strategy as the best way to grow Ryanair, Sun, Lauda and other possible airline brands, Michael O’Leary has agreed a new 5 year contract as Group CEO, which secures his services for the group until at least July 2024. His agreement to commit for a 5 year period is welcome, and will give certainty to our shareholders and allow him to guide the individual CEO’s of Ryanair, Laudamotion and Ryanair Sun.
The Board had previously committed to setting out its succession plan before the Sept. 2019 AGM. In that regard, David Bonderman (Chairman) and Kyran McLaughlin (SID) have agreed to lead the Board for 1 more year until summer 2020, but neither of them wishes to go forward or be considered for re-election at the September 2020 AGM. In order to ensure a smooth succession, Stan McCarthy who joined the Board in May 2017, has agreed to take up the position of Deputy Chairman from April 2019, and will transition to Chairman of the Board in summer 2020. Stan will bring his enormous international experience (as a former CEO of Kerry Group Plc) and leadership skills to the development of Ryanair Holdings over the coming years, although a legend like David Bonderman will be a very hard act to follow.
Ryanair, Ireland’s No. 1 airline, today (31 Jan) launched special return flights for rugby fans travelling for Munster’s European Rugby Quarter-Final against Edinburgh on Saturday, March 30th.
Ryanair’s rugby specials will depart from Dublin, Shannon, and Cork on 29th March and return from Edinburgh on 30th and 31st March − ensuring the red army can cheer on Munster on the lowest fares.
These rugby specials are on sale now, so Munster fans should book today on www.ryanair.com to ensure they don’t miss out.
Ryanair’s Robin Kiely said:
“We’ve launched special rugby flights for Munster v Edinburgh after huge demand. Our specials depart Dublin, Shannon, and Cork on 29th March and return from Edinburgh on 30th and 31st March. These rugby specials are on sale now, so Munster fans should beat the scrum and log on to www.ryanair.com today.”
| Edinburgh v Munster: Saturday, March 30 12.45pm |
| DATE |
ROUTE |
DEPARTS |
| 29 March |
Shannon – Edinburgh |
16:40 & 20:00 |
| 29 March |
Cork – Edinburgh |
18.30 & 20:25 |
| 29 March |
Dublin – Edinburgh |
16:35 & 19:45 |
| 30 March |
Edinburgh – Cork |
20:45 |
| 31 March |
Edinburgh – Shannon |
12:00 & 15:20 |
| 31 March |
Edinburgh – Cork |
13:15 & 16:45 |
| 31 March |
Edinburgh – Dublin |
11:30 & 14:45 |
Ryanair, Europas Airline Nr.1, hat heute (25. Januar) vier neue deutsche Strecken nach Kiew angekündigt, die ab Oktober 2019 zweimal wöchentlich von Düsseldorf Weeze, Frankfurt Hahn, Karlsruhe/ Baden Baden und Nürnberg angeflogen werden und nun alle unter Ryanair.com erhältlich sind.
Deutsche Kunden und Touristen können sich über noch günstigere Preise und die neuesten Verbesserungen im Rahmen des „Always Getting Better“-Programms freuen:
- Noch mehr Routen, Flüge und Ziele
- Ryanair Roomsmit einem Flugguthaben von 10 Prozent
- Die Reiseführer-Plattform „Try Somewhere New“ auf Ryanair.com
Ryanair’s Sales & Marketing Executive DACH Johannes Roemer dazu:
Ryanair freut sich, diese 4 neuen Strecken nach Kiew ab Oktober bekannt zu geben, die alle zweimal wöchentlich von Düsseldorf Weeze, Frankfurt Hahn, Karlsruhe/ Baden Baden und Nürnberg aus, im Rahmen unseres erweiterten Flugplans 2019 bedient werden.
Um dies zu feiern, bieten wir in unserem europäischen Netzwerk bis zu 20% Rabatt auf Hin- und Rückflüge für Reisen von April bis Juni an, die bis Samstag (26. Januar) um Mitternacht gebucht werden können. Diese Sitze werden sich garantiert schnell verkaufen, deswegen sollten sich die Kunden noch heute bei Ryanair.com anmelden, um nichts zu verpassen.“
- Laudamotion Flotte umfasst 25 Flugzeuge im S19 und bestätigt die Unterzeichnung eines LOI zum Wachstum auf 30 Flugzeuge im Sommer 2020
- Wachstumsprognose von 4 Mio. Passagieren im 1. Jahr auf 6 Mio. im 2. Jahr.
Laudamotion, Österreichs Low Fare Airline Nr. 1, bestätigt heute (am 29. Jänner 2019), dass Ryanair Ende Dezember den Erwerb der 100%-igen Beteiligung an der Laudamotion GmbH der NL Holding abgeschlossen hat. Laudamotion ist jetzt eine 100%-ige Tochtergesellschaft der Ryanair Holdings Plc, welche Eigentümerin Europas größter Airline ist.
Mit der Unterstützung der Ryanair Holding kündigt Laudamotion heute eine Reihe spannender Wachstumsinitiativen an. Darunter fallen:
• Mit der Aufstockung der Flotte im Sommer 2019 von 19 auf 25 Flugzeuge, will die Airline den eingeschlagenen Wachstumskurs weiter verfolgen. Für weitere Flugzeuge wurden bereits eine Reihe an LOI-Verträge mit Leasinggebern unterzeichnet, sodass dass sich die Flotte im Jahr 2020 auf 30 Airbus A320 erhöht. Dieser Flottenausbau ermöglicht die Passagierzahlen von 4 Millionen Gästen im 1. Jahr auf 6 Millionen Gäste im 2. Jahr (FY2020) zu steigern. Im Geschäftsjahr 2020/21 plant die Airline bereits 7,5 Millionen Passagiere zu befördern.
• Die Flotte wird in den 4 Laudamotion Basen wie folgt ausgebaut. In Wien erhöht sich die Anzahl der Airbus A320 von 4 auf 8, in Düsseldorf auf 7, in Stuttgart auf 3 und in Palma auf 2.
Im Winter 2019 wird die Flotte auf 11 Flugzeuge in Wien erweitert und bringt somit Laudamotion auf Platz 2 aller Airlines in Wien, direkt hinter Austrian Airlines.
• Laudamotion gibt den ersten Teil des Winterflugplans 2019/20 zur Buchung frei und bietet Fluggästen günstige Preise und mehr Frequenzen an. Insbesondere ab Wien komplettieren neue Verbindungen das Portfolio der größten Heimat-Basis. Der restliche Winterflugplan mit über 20 neuen Zielen aus Wien, Stuttgart, Düsseldorf und Palma wird in den nächsten zwei Monaten veröffentlicht.
• Auch personell legt Laudamotion derzeit auf Rekordkurs. Bis zu 400 neue Arbeitsplätze für Piloten, Kabinenpersonal und Technik werden bis 2020 ausgeschrieben. Durch die Umsiedlung des Headquarters zum Concorde Business Park, liegt auch räumlich eine positive Veränderung vor. Im März 2019 beziehen alle Headquarter-Mitarbeiter in Wien brandneue und moderne Arbeitsplätze.
• Zur Feier der Veröffentlichung des Winterflugplans startet Laudamotion mit einer Rabattaktion durch und bietet 250.000 Tickets ab € 19,99 One-Way im Februar, März, April und Mai von Wien, Stuttgart und Düsseldorf an. Tickets sind auf laudamotion.com buchbar.
Laudamotion CEO, Andreas Gruber:
„Laudamotion blickt mit der Unterstützung von Ryanair mit großer Zuversicht in die Zukunft und plant in den nächsten 3 Jahren ein Rekordwachstum mit einem jährlichen Passagieraufkommen von 10 Millionen.
Sobald wir unsere finalen Gespräche mit den Flughafen Handling Partnern erfolgreich abgeschlossen haben, werden wir bis Ende März zusätzlich noch über 20 Routen für den Winter 2019 veröffentlichen. Unser Sommer 2019 Flugprogramm ermöglicht ein Passagierwachstum auf über 6 Millionen im Jahr 2, mit einem Wachstum von mehr als 50%, gemessen an den 4 Millionen Passagieren die im Jahr 1 transportiert werden. Zudem werden wir natürlich auch weiterhin unseren Passagieren Flüge zu einem unschlagbaren Preis-Leistungs-Verhältnis, mit unserem charmanten Lauda Service, ab unseren Basen in Wien, Stuttgart, Düsseldorf und Palma mit einer einheitlichen Airbus Flotte anbieten.“
Laudamotion Deputy CEO, Colin Casey:
„Der stetige Wachstum der Laudamotion spiegelt sich auf in den derzeit laufenden Verhandlungen mit über 50 Flughäfen über neue Routen und Handling-Verträge wieder. Durch den Verkauf und Schließung einiger Stützpunkte anderer Fluggesellschaften, zeigt sich Österreichs Low Fare Airline Nr.1 als attraktiver neuer Arbeitgeber und wird von Bewerbungen von Piloten- und Kabinenpersonal überhäuft. Das Flottenwachstum konzentriert sich nicht nur auf den österreichischen und deutschen Markt, sondern auf ganz Europa. Im Winter 2019 planen wir, mindestens eine neue Basis außerhalb Österreichs und Deutschlands ankündigen zu können. In Mittel- und Westeuropa gibt es eine Reihe neuer Flughäfen, die dieses Geschäft für sich gewinnen wollen.
In einer Zeit, in der Austrian Airlines 13,9 Millionen Passagiere befördert, haben wir aufregende Pläne,
auf 10 Millionen Passagiere innerhalb der nächsten drei Jahre zu wachsen und werden damit Österreichs zweitgrößte Airline.“
- Lauda commits to 24 aircraft in S19 & signs LOI to grow to 30 aircraft in S20
- Lauda traffic to grow from 4m in year 1 to 6m in year 2
Laudamotion, Austria’s No. 1 low fares airline, today (29 Jan) confirmed that Ryanair has completed the purchase of 100% shareholding in Laudamotion GmbH from NL Holdings in late December. Laudamotion now becomes a 100% subsidiary of Ryanair Holdings Plc, the Group which owns Europe’s largest airline.
With the support of Ryanair Holdings, Laudamotion today announces a series of exciting growth initiatives, which includes:
- Increasing Lauda’s fleet to 25 aircraft in summer ’19 (from 19 in S2018). Lauda today announces that it has signed LOI agreements with a number of lessors which will increase its Summer ’20 fleet to 30 – all Airbus – aircraft, which will allow Lauda to grow its traffic from 4m guests in year 1 to 6m guests in year 2 (FY March 2020) to 7.5m guests in FY March 2021.
- This summer, Laudamotion will operate 4 bases as it grows in Vienna from 4 to 8 aircraft, Dusseldorf 7 aircraft, Stuttgart 3 aircraft, and Palma 2 aircraft. In winter 2019, the Vienna base will increase further to 11 aircraft, making Laudamotion Vienna’s No.2 airline, just behind Austrian Airlines. Laudamotion is releasing the first part of its winter 2019 flight schedules today, offering passengers lower fares and more frequencies, from Vienna in particular. Details of up to 20 new routes from Vienna, Stuttgart, Dusseldorf, and Palma, will be announced in the next month or two once airport and handling negotiations have been successfully completed.
- Laudamotion today announced details of up to 400 new jobs for pilots, cabin crew, and engineers across its 4 bases. It also unveiled details of its new Head Office (at Concorde Business Park), which it will move into in March 2019, and released details of a 250,000 seat sale with fares starting from €19.99 one way for travel in Feb, Mar, Apr and May from Vienna, Stuttgart, and Dusseldorf bases.
Speaking in Vienna today, Laudamotion’s CEO, Andreas Gruber, said:
“With the backing of Ryanair, Laudamotion is set to grow strongly over the next 3 years to carry 10m passengers p.a. We will release details of up to 20 new routes for winter 2019 once we have completed our airport and handling negotiations by the end of March. Our summer ’19 program will allow us to carry 6m passengers in year 2, a growth rate of 50% over the 4m carried in year 1, as we continue to offer our customers in Vienna, Stuttgart, Dusseldorf and Palma the lowest air fares on a fleet of young Airbus aircraft with widespread passenger appeal and great Lauda service.”
