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Ryanair reduces Q3 losses

Source: Financial Times - Mon 1st Feb 2010

Ryanair has raised its full-year profit guidance after reporting a much smaller loss than expected for its third quarter.

Europe's biggest no-frills airline had previously forecast a full-year net profit in the lower end of the 200-300m range. But on Monday the company said its yields, or average fare levels, had been better than expected in the three months to December and should continue into the fourth quarter.

"As a consequence, we have now increased our full-year net profit guidance to 275m," said the airline's chief executive, Michael O'Leary.

Yields at Ryanair still fell by 12 per cent over the quarter, but this was an improvement on the 20 per cent fall it had previously forecast. The airline said it thought the full-year yield decline would now be closer to 15 per cent, rather than the 20 per cent it had previously predicted.

Analysts had forecast that a combination of bad winter weather and slumping demand would have pushed the airline into a third-quarter net loss of about 35m, but Ryanair instead reported a net loss of 10.9m.

Mr O'Leary said this result was still "disappointing", but much better than the 101.5m loss reported for the same quarter a year ago.

Joe Gill, analyst for Dublin-based Bloxham stockbrokers, said the numbers were very promising.

"In producing numbers like these, Ryanair will re-ignite optimism among those who believe the planned 800m profit in 2012 can be achieved," he wrote in a note.

Mr O'Leary said Ryanair expected to increase market share as a result of the demise of several carriers in the last few months, including Flyglobespan in the UK and Blue Wings in Germany. "We expect further casualties this winter," he added.

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