The Irish budget airline on Monday released its half-year report, which shows:
- a 13% rise in customer numbers to 58.1 million;
- a 14% jump in revenue to €4 billion (£2.86 billion, $4.4 billion);
- and a 37% increase in pre-tax profit to €1 billion (£720 million, $1.1 billion).
Ryanair also increased its full-year traffic target to 105 million, up from 104 million which was already an upgraded figure.
CEO Michael O'Leary said in this morning's statement:
We have enjoyed a bumper summer due to a very rare confluence of favourable events including stronger sterling, adverse weather in northern Europe, reasonably flat industry capacity and further savings on our unhedged fuel, as millions of customers switched to Ryanair for our Always Getting Better ("AGB") customer experience programme.
Lets unpack that.
The stronger pound sterling actually hit Ryanair with rising costs for staffing and airport handling charges, as Ryanair's main currency is euro. But Britain is a huge market for Ryanair and more ticket sales in Britain mean more pounds, which translate to more euros when converted back.
"Adverse weather in northern Europe" means people in places like Germany and Poland have booked more holidays because of the wind and rain in their home countries.
"Flat industry capacity" means rival airlines haven't been increasing the number of seats available to fly. If capacity increases, that puts downward pressure on prices.
Now, here's the big one - "further savings on our unhedged fuel". Most airlines will agree to buy their fuel well in advance, fixing a price when they do so. But Ryanair do relatively little of this, meaning it has been able to take advantage of the recent collapse in oil prices.
Fuel costs, Ryanair's biggest expense, actually fell by 1% in the first half of the year compared to last - falling to €1.15 billion (£820 million, $1.27 billion). The falling fuel cost meant average fares rose by 2%, as the cost of flying each seat fell by 6%.
Ryanair is now taking advantage of the low oil price. The airline said it has extended hedges to cover 95% of 2017, with oil paid for at an average of $62 a barrel. It expects this to deliver savings of €430 million (£307.6 million, $474.5 million).
And all these beneficial factors - a strong pound, weak industry competition, falling fuel costs - are happening as Ryanair is overhauling its image with its "Always Getting Better" drive, trying to be more attentive to customers and less of the "cheap and nasty" airline it's been seen as in the past. This remake is helping to drive ticket sales.
As a result of all this good luck, Ryanair said Monday it expects full-year profit to be "towards the upper end of our €1,175m to €1,225m range." Ryanair also increased its full-year traffic target to 105 million, up from 104 million which was already an upgraded figure.
But the airline added that full-year profit is "heavily dependent" on fourth quarter bookings and it is way to early to make any predictions about how they will go.