Ryanair announces return to profit

<p>Ryanair has raised its full-year net profits to between €840 million and €850 million.</p>

Ryanair has announced a return to profit following a strong performance in the final three months of 2014.

The Irish budget airline announced a revision of its full-year net profits to between €840 million and €850 million (£632 million and £640 million), up from the previous forecast of between €810 million and €830 million. Ryanair stated that it is expecting traffic to increase by around 25 per cent in the three months to March 30th while falling oil prices will reduce costs by five per cent.

Michael O'Leary, chief executive of Ryanair, commended the results stating that they highlighted the company's increased focus on customer service. Mr O'Leary said: "These strong results confirm that our “Always Getting Better” customer programme and our expanded business schedules, coupled with our substantial fare and cost advantage over competitor airlines is drawing millions of new customers to Ryanair."

Aer Lingus situation

Ryanair currently holds a 29 per cent stake in the Irish flag carrier Aer Lingus. The company has been the subject of a number of takeover approaches by British Airways owner International Airlines Group (IAG). Last week saw IAG make its latest bid which was considered by the organisation.

Aer Lingus has previously rejected bids from IAG but it stated it was willing to discuss the new €1.36 billion approach. For the deal to be pushed through both Ryanair and the Irish government need to give approval, the latter holding a 25 per cent share in Aer Lingus. Ryanair itself has had takeover bids turned down.

The company said that while the takeover deal was still ongoing, it confirmed that it had not received a formal offer for its holding. However, it did say that if one was to come that it would be carefully considered.

Ryanair's share price opened 3.17 per cent down on Monday (February 2nd).

Keep up-to-date with the Aer Lingus takeover deal at City Index.

Join our live webinars for the latest analysis and trading ideas. Register now

GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.