Shares across the European airline industry rose after Ryanair said it expects to record higher profits this year following strong sales over the festive period.
The low cost airline enjoyed a better than expected Christmas and New Year period, including high sales from passengers who left it to the last minute to book.
The stronger trading will come as a welcome boost to Ryanair, which has suffered from the industry-wide disruption caused by the grounding of Boeing’s 737 Max jets after two fatal crashes.
Shares rose 8.5 per cent in early trading on Friday, while easyJet, British Airways parent IAG and Lufthansa also recorded gains as investors bet Ryanair’s rivals will also have enjoyed a bumper Christmas.
Analysts at broker Liberum said they expected easyJet in particular could have benefited from similar trends, although they cautioned that the effect of Boeing’s Max grounding and the failure of Thomas Cook leaves capacity growth in the short haul market “especially restrained”.
Ryanair was twice forced to reduce its outlook for the number of passengers it expects to carry in its 2021 fiscal year, as it now only expects to receive 10 aircraft for summer 2020 rather than the 20 it previously planned, leading it to outline plans to close some hubs.
Ryanair on Friday said it sees full-year pre-tax profit of between €950m and €1.05bn in its 2020 fiscal year ending in March, up from the previously forecast €800m to €900m. It expects to hit the midpoint of the new range, based on current trading.
The airline also said that early bookings for this quarter were running 1 per cent ahead of last year, with better than expected fares, while it nudged up expectations for the number of passengers it will carry in the year to 154m from 153m.
“We believe momentum into the summer in a very tight market will be powerful,” analysts at Davy Research said in a note.
Still, Ryanair on Friday warned its Austrian subsidiary Laudamotion has suffered from price competition in its local market, leading it to report lower average fares over Christmas than had been expected as it competes with Lufthansa subsidiaries. Laudamotion’s net loss for the year will now widen from under €80m to around €90m.
Ryanair will release its third-quarter results on February 3.