DUBLIN Ryanair raised its 2011 profit forecast by 10 percent on Monday, saying higher revenue per passenger mile would offset stubbornly high fuel prices.
Europe's largest budget airline said it had seen virtually no impact from the downturn in consumer confidence, but warned traffic would fall in the coming months as it grounded 80 aircraft as a result of high fuel prices.
"We are well booked for the coming months, fractionally ahead of where we were last year," Chief Financial Officer Howard Millar told Reuters. "So far we have not seen any impact from recession."
Ryanair (RYA.I), which flew over 70 million passengers last year, said it expected to make a profit before tax of 440 million euros (377 million pounds) for its 2011 financial year, up from its previous forecast of 400 million.
Yields -- the keenly watched measure showing average revenue gained per mile per passenger -- will grow at 14 percent in the six months to March, up from 12 percent previously forecast.
"The surprise is that the yield is so strong," said Gerard Moore, analyst at Merrion Stockbrokers in Dublin. "They often increase their guidance at this time of year, but given the weak consumer environment there had been doubts they could pull it off."
The airline, which released results for the first half of its 2011 financial year, earned 452 million euros in the six months to September, up 20 percent from a year earlier, on revenues of 2.18 billion euros.
Passenger numbers were up 12 percent and fares up 13 percent in the first half, while unit costs grew 13 percent, mainly on account of higher fuel prices.
Net profit before tax for the three months to September was 404 million euros, beating the average forecast of six analysts polled by Reuters of 393 million.
At 0808 GMT shares in Ryanair were up 3.5 percent at 3.46 euros.
Ryanair is down 7 percent since the beginning of the year, compared with a fall of 21 percent at rival low-cost carrier EasyJet (EZJ.L).
Industry body IATA has said it expects airlines to suffer a weak end to the year due to waning consumer confidence, sluggish international trade and high fuel prices.
Lufthansa (LHAG.DE) last week reported results battered by high fuel costs, while International Airline Group (ICAG.L) on reported a 31 percent fall in third-quarter profit.
NO AER LINGUS SALE SOON
Millar said he believed the sale of Ryanair's 29 percent stake in rival Irish airline Aer Lingus was likely off the agenda in the coming months after possible buyer British Airways (ICAG.L) purchased BMI.
Ryanair has not spoken to anyone about a possible sale and is waiting for the Irish government to find a buyer for its 25 percent stake before selling, Millar said.
"That is off the agenda for some time. Unless someone comes out of woodwork," Millar said. "So far no one has any interest in buying the government stake."
He said Ryanair remained in talks with Boeing about a large aircraft order and described the U.S. manufacturer as the most likely source of new planes despite talks in recent months with Chinese and Russian manufacturers.
Talks with Boeing over a 200-plane order broke down in 2009.
"Boeing would be the logical choice as we have 270 aircraft, unless someone else presented us with offer we couldn't refuse," he said.
(Reporting by Conor Humphries; Editing by Jon Loades-Carter and Sophie Walker)