London - Ryanair plans to accelerate its European expansion to take advantage of financial woes at regional competitors and reduce its reliance on an uncertain UK market.
Europe’s biggest discount carrier is in talks with Boeing to add two or three more jets to its existing delivery schedule while extending leases on 10 other planes through 2019, Ryanair said in a statement on Tuesday. That’ll help fuel growth in Italy, Germany, Poland and Romania, where airlines including Air Berlin and Alitalia are restructuring operations amid steep losses.
“There’s a huge amount of opportunities out there across Europe as we grow and one of the limiting factors continues to be deliveries of the aircraft,” chief financial officer Neil Sorahan said in a phone interview. “We’ve said to Boeing, if they see gaps in their schedule and have additional aircraft, we’ll take them.”
Ryanair has been cutting costs and slashing prices to undercut rivals on regional routes, while expanding its transatlantic partner network to feed into the lucrative long-haul segment.
Its strategy brings its business model closer to traditional network carriers after a previous focus on bare-bones point-to-point travel. This weekend’s massive cancellations at British Airways could also be a boon for Ryanair.
Ryanair is following low-cost rival EasyJet in bulking up its fleet. Its London-based rival earlier this month upgraded an order for 30 Airbus narrow-body aircraft to the biggest A321 variant. The moves will add additional pressure on other European competitors.
Profit growth
Rising demand in the past year helped push Ryanair’s net income for the fiscal year ended March 31 to €1.32bn from €1.24bn a year earlier, according to the statement. Passengers increased 13% to 120 million, bolstering profit despite a 13% drop in fares.
The slide in ticket prices should ease to between 5% and 7% this year as supply better matches demand. The airline predicted an increase in fiscal 2018 earnings of about 8% to between €1.4bn and €1.45bn.
Lack of clarity on whether the UK will opt to remain in Europe’s open skies agreement could cause “significant disruption” of flights between the two regions for months after Brexit takes effect in March 2019, the company said.
“In the absence of such certainty, or direction, we will continue to pivot our growth away from the UK in 2017 and 2018 to capitalise on the many growth opportunities elsewhere in Europe,” Ryanair said.
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