BUSINESS NEWS
Ryanair profits fall to €1bn despite 7% passenger rise
Ryanair reported a full-year pre-tax profit of €1.02 billion for the 12 months to March, 29% down on last year, despite excluding a €140 million loss at Austrian subsidiary Lauda which it acquired in December. Passenger numbers rose 7% year
on year to 139 million, or 142 million including Lauda, and Ryanair’s revenue rose 6% to €7.56 billion, with ancillary sales up 19% to almost one third of the total. However, the carrier’s average
fare was down 6% to €37 reflecting the pressure on prices due to overcapacity in Europe. Chief executive Michael O’Leary argued the competitive pressure would
Michael O’Leary
EasyJet reports loss of £5.95 for every seat sold in interim results
EasyJet reported a half-year loss of £275 million to the end of March, up from just £18 million the previous year despite a 13% rise in passenger numbers. Te carrier’s half-year revenue
only benefit Ryanair, saying: “As weaker European airlines are sold or fail, airports are competing to atract Ryanair. Our airport costs are 35% lower than our nearest competitor.” Ryanair forecast the pressure on
fares “will continue through summer 2019” while “costs will increase”. O’Leary said: “We expect further
consolidation and airline failures in winter 2019 and again into 2020 due to overcapacity, weaker fares and higher oil prices.”
rose 7% to £2.43 billion but its capacity increase of 14.5% outpaced the passenger increase and the pressure on fares produced a 6.3% fall in revenue per seat while costs rose by almost 4%. It resulted in easyJet losing
£5.95 on average on every seat sold. Yet the carrier’s profit forecast for
the full year remained unchanged despite forward bookings to June, at 72%, being three percentage points behind the same point last year.
Chief executive Johan Lundgren
described the performance as in line with expectations amid “tougher trading conditions” and noted “the negative impact of Brexit-related market uncertainty as well as a wider macroeconomic slowdown in Europe”. Te carrier has increased capacity
for the summer by 7% year on year, but Lundgren said growth this winter and into 2020 will be lower, near “the lower end of historic growth rates” or close to 3%. He confirmed easyJet Holidays’
programme for 2020 will go on sale at the end of this year, with negotiations “well advanced with key hotel partners”.
Tui unfazed by €301m winter loss Ian Taylor
Tui recorded a sharp rise in first-half losses, reporting an underlying operating loss of €301 million for the six months to March, up from €170 million last winter. Tat was despite a near 2% rise in
group turnover to €6.7 billion. Easter’s move from March last
year to April this accounted for some of the shortfall, but chief executive Fritz Joussen stressed the impact of “overcapacities to Spain, in particular the Canaries, and consequently lower margins”. He pointed out: “Te positive
development of bookings to Turkey and the eastern Mediterranean will become visible only in the second half.” Tui leſt its full-year profit forecast unchanged aſter warning in March
travelweekly.co.uk
2% Rise in Tui Group turnover for the six months to March 31
that profits would be up to 26% below last year’s €1.2 billion as a result of the grounding of the Boeing 737 Max. Te group has 15 of the aircraſt, which have been grounded since March. Tui put the cost of the grounding
at €200 million to €300 million depending on when the aircraſt return to service. Te company will decide this month whether to lease replacement aircraſt through to the end of the summer. Joussen reported a 2% fall in
customers year on year across Tui’s markets and airlines, noting “the market remains challenging for traditional tour operators”. But he insisted: “2019 will be
another solid year for Tui. We have a clear compass. We will be among the winners, not the losers. Our core businesses are highly profitable and positioned for growth and we have a strong balance sheet. “Our transformation from a
traditional tour operator to a hotel and cruise company has been completed. Our transformation as a digital and platform business is progressing massively. Our destination experiences business offers substantial new potential. “Tui will emerge as a stronger,
more efficient and more profitable group from the current consolidation in our sector.”
23 MAY 2019 Fritz Joussen 71
PICTURES: Rudiger Nehmzow; Shutterstock
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