Ryanair soars with 26% jump in Q2 net

RYANAIR Holdings Plc, Europe's biggest discount airline, increased second-quarter profit 26 percent and raised its full-year outlook as passenger numbers rose faster than it expected and sales were buoyed by charges for priority boarding and checked bags.

Net income for the three months ended on September 30 rose to 269 million euros (US$390 million), or 17.55 cents a share, from 213 million euros, or 13.73 cents, a year earlier, the Dublin-based company said in a statement yesterday. Analysts predicted a profit of 259 million euros. Sales rose 25 percent to 861.3 million euros.

Ryanair is trimming winter capacity to bolster margins and said yesterday that a decline in second-half yields, or average fares, should be at the lower end of its estimates. Full-year earnings will jump 17.5 percent to about 470 million euros, 30 million euros more than last forecast, the carrier said.

"Based on our current forward bookings and the impact of Easter in the fourth quarter, we now anticipate that second-half yields will be somewhat better than previously forecast," Chief Executive Officer Michael O'Leary said.

Shares of Ryanair have gained 10 percent this year, valuing the company at 8.6 billion euros. The stock gained 26 percent last year and 58 percent in 2005, Bloomberg News said.

Ryanair cut fares and gave away tickets to attract passengers as higher UK travel taxes and interest rates deterred consumers in its biggest market. The airline has made up for falling prices by boosting sales from non-flight items such as insurance and baggage fees.

So-called ancillary revenue increased 54 percent in the first half to 252 million euros and now accounts for about 16 percent of total sales, Ryanair said in the statement.

"These are good results," said Ross McEvoy, an analyst at Bloxham Stockbrokers in Dublin. "The results are slightly ahead of expectations, though driven by ancillary-revenue growth and not in the yield performance as many would have anticipated."

Ryanair in May predicted "softer" market conditions in the first and second quarters and decided to ground seven of its planes at London Stansted, its biggest hub.