Ryanair Raises FY Passenger Target, Sees FY Profit Near Upper End of Range

        By Robert Wall

        LONDON--Ryanair Holdings PLC (RYA.DB) on Monday raised its full-year passenger target and said earnings would come in at the top end of guidance as Europe's biggest budget airline reported first-quarter net profit rose 25%.

        The Irish budget carrier said its profit for the financial year ending in March would be at the top end of its guidance of 940 million euros ($1.03 billion) to EUR970 million, since ticket prices during the key summer period were higher than anticipated. Prices, which had been expected to fall as much as 2% in the first six months through September, now are expected to be flat.

        Ryanair said it would likely transport 103 million passengers in the current financial year versus 100 million previously forecast.

        In the past two years, Ryanair has been shifting its operations to more primary airports and also sought to win business travelers. That will drive it to park fewer aircraft in the weak winter months, when it expects to idle 40 planes this year.

        Even so, Ryanair held off on raising full-year profit guidance, noting the second half faces some headwinds.

        Faster capacity growth and lower oil prices should lead to "an aggressive pricing response from competitors who will try to defend their market share," Chief Executive Michael O'Leary said, adding, "We therefore remain very cautious about weaker prices and yields this winter."

        Net profit in the first three months ended June 30 was EUR245 million ($270 million) compared with EUR197 million a year ago. Sales advanced 10% to EUR1.65 billion, the Irish carrier said, as it carried 28 million passengers, or 16% more that in the prior-year period.

        Ryanair this month said it would exit its 29.8% stake in Aer Lingus Group PLC as part of a takeover bid for the Irish carrier by International Consolidated Airlines Group SA. Ryanair is poised to receive about EUR400 million for its stake. The airline said it expects to receive the money in September if the deal closes and will decide at its annual shareholder meeting how to use the funds.

        Though falling oil prices have benefited Ryanair and rivals, the effect for the discount carrier has been mitigated somewhat by its fuel hedges that locked in prices at levels above the current market. Ryanair uses the financial instruments to have price certainty.

        The carrier said it had taken advantage of recent low fuel costs to lock in lower prices for next year, where it has 70% of costs now secured. At those prices, Ryanair predicts savings of up to EUR250 million for the coming financial year.

        Write to Robert Wall at robert.wall@wsj.com

        (END) Dow Jones Newswires

        July 27, 2015 01:02 ET (05:02 GMT)

#FX

#Forex

#SaleForex

#RyanAir

#Raises_FY_Passanger

#Sees_FY_Profit

#NearUpperEndRange