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Ryanair raises profit forecast by a quarter after strong summer

The rise was due to stronger than expected peak summer traffic

People escaping the wet UK summer boosted Ryanair

Budget airline Ryanair (LON:RYA) has raised its profit forecast by a quarter after more holiday makers than expected took to the skies on its aircraft.

Ryanair said it expected full-year net profit to come in at up to €1.225bn rather than the €940mln-€970mln it had previously predicted.

It said the rise was due to stronger than expected peak summer traffic at slightly higher than anticipated air fares.

It said first-half traffic had risen 13% rather than the forecast 10% while fares in the same period were up more than 2%, rather than flat as expected.

Ryanair had originally planned to update shareholders on current trading at its annual meeting on September 24.

However, it said the strength of its July and August numbers had continued into September and the scale of the upgrade - 40% up on the prior year - required it to bring forward its update.

The carrier warned that annual results still heavily depended on close-in bookings in the third quarter, which were 30% sold, and the fourth quarter, about which it has no idea at the moment.

Chief executive Michael O'Leary said the airline expected to increase traffic by more than 13 million this year, but cautioned on the outlook.

"We have been surprised by the strength of close-in bookings and fares this summer during which we delivered record 95% load factors in both July and August while fares grew by over 2%, when we had expected them to be flat," he said.

"We would caution that not all of this improvement is due to either our model or our management. We have clearly benefited from favourable industry trends this summer including bad weather in Northern Europe, stronger sterling encouraging more UK families to holiday in the Med, reasonably flat capacity across the EU industry and lower prices for our unhedged oil.

"Being the airline industry, we do not expect these favourable conditions will persist, and we would urge shareholders and analysts to avoid irrational exuberance while we continue to execute our very ambitious growth plans during what we expect to be very attritional and sustained fare wars across Europe this winter.”

Quick facts: Ryanair Holdings plc

Price: 12.255 EUR

Market: LSE
Market Cap: €13.44 billion

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