Irish no-frills airline Ryanair hiked its annual earnings forecast on Monday after posting soaring profits, and confirmed a proposal it hopes will enable it to win a battle to buy rival Aer Lingus.
A Ryanair flight takes off from Barcelona airport in 2010. Irish no-frills airline Ryanair hiked its annual earnings forecast on Monday after posting soaring profits, and confirmed a proposal it hopes will enable it to win a battle to buy rival Aer Lingus.
Profit after tax jumped 21 percent to 18.1 million euros ($24 million) in the group's third quarter, or three months to December 31, compared with the same part of 2011, sparking an upgrade to its forecasts, Ryanair said in a statement.
The airline added in a separate statement that it had submitted "a radical and unprecedented remedies package to the EU in support of its offer for Aer Lingus," confirming media reports last week.
The Dublin-based carrier meanwhile said that its third-quarter profits rose on higher ticket income, helping to offset an 81 million-euros increase in fuel costs.
"Our Q3 profit of 18 million euros was ahead of expectations due to strong pre-Christmas bookings at higher yields," group chief executive Michael O'Leary said in the earnings statement.
The airline warned that its fourth-quarter traffic would drop by about 400,000 passengers, or 3.0 percent below the level during the equivalent period one year earlier owing to Ryanair grounding up to 80 aircraft to cushion high oil prices, and airport fees as well as seasonally weaker demand.
Nevertheless, Ryanair said it expected the group's full-year profits to reach close to 540 million euros, exceeding its previous guidance of between 490 million euros and 520 million euros and a 7.0-percent rise on 2011/12.
Elsewhere, O'Leary said he believed Ryanair had now addressed all competition issues raised by the European Commission regarding the carrier's hostile takeover bid for Aer Lingus.
"The remedies involve two upfront buyers each basing aircraft in Ireland to take over and operate a substantial part of Aer Lingus' existing route network and short-haul business," O'Leary said.
Reports last week said Ryanair has offered to offload more than a third of Aer Lingus' short-haul operations to secure the takeover.
The Financial Times had said that Ryanair would dispose of 23 routes where a takeover would create a monopoly -- to British rival low-cost airline Flybe.
The business daily added that Ryanair had proposed to give British Airways the right to purchase about half of Aer Lingus' slots at London Heathrow airport that are used to fly services to Ireland.
Ryanair owns 30 percent of Aer Lingus and last July offered to buy the Irish government's stake in the airline, but Dublin has stood firm and last month formally announced that it would not sell.
The Irish government owns 25.1 percent of Aer Lingus -- not enough to single-handedly block Ryanair's offer, while the European Commission fears that a takeover would diminish competition for Irish consumers.
The Commission blocked an earlier Ryanair bid for Aer Lingus in 2006, arguing that it would harm competition.
Investors meanwhile applauded Monday's upbeat earnings news, with Ryanair's share price rebounding from session lows.
"Ryanair reported numbers ... that saw strong growth in European fares, but the market was underwhelmed by a warning of marginal passenger growth in 2013, capped by a slow-down in plane deliveries," said CMC Markets trader Matt Basi.