Ryanair raises profit forecast as yields surge

Ryanair raised its 2011 profit forecast by 10 per cent yesterday, saying higher revenue per passenger mile would offset stubbornly high fuel prices. The European budget airline said it had seen virtually no impact from the downturn in consumer confidence, but warned traffic would fall in the coming months as it grounded 80 aircraft as a result of high fuel prices. \"We are well booked for the coming months, fractionally ahead of where we were last year,\" chief financial officer Howard Millar told Reuters. \"So far we have not seen any impact from recession.\" The airline, which flew over 70 million passengers last year, said it expected to make a profit before tax of ¤440 million (Dh2.22 million) for its 2011 financial year, up from its previous forecast of €400 million. Yields — the keenly watched measure showing average revenue gained per mile per passenger — will grow at 14 per cent in the six months to March, up from 12 per cent previously forecast. \"The surprise is that the yield is so strong,\" said Gerard Moore, analyst at Merrion Stockbrokers in Dublin. \"They often increase their guidance at this time of year, but given the weak consumer environment there had been doubts they could pull it off.\" The airline, which released results for the first half of its 2011 financial year, earned ¤452 million in the six months to September, up 20 per cent from a year earlier, on revenues of ¤ 2.18 billion. Passenger numbers were up 12 per cent and fares up 13 per cent in the first half, while unit costs grew 13 per cent, mainly on account of higher fuel prices. Net profit before tax for the three months to September was ¤404 million, beating the average forecast of six analysts polled by Reuters of ¤393 million. At 0808 GMT shares in Ryanair were up 3.5 per cent at ¤3.46. Ryanair has been down 7 per cent since the beginning of the year.