Ryanair Holdings Plc lifted its full-year profit forecast 25 percent, sending shares of Europe’s No. 1 discount carrier up the most in 10 months as it joined EasyJet Plc and Deutsche Lufthansa AG in reporting strong summer sales.
Ryanair rose 9.9 percent in Dublin after saying profit after tax will be between 1.175 billion euros and 1.225 billion euros ($1.32 billion and $1.37 billion) in the 12 months ending March 31. EasyJet, which raised its earnings goal last week, added as much as 3 percent, British Airways parent IAG advanced
3.5 percent and Lufthansa gained 2 percent.
Earnings during the northern summer were aided by surging demand that led to higher-than-expected fares, according to Ryanair Chief Financial Officer Neil Sorahan, who said sales were spurred by the wettest U.K. August in a century. EasyJet cited the same exodus of sun-seeking Britons to warmer climes as a factor when predicting a record profit Sept. 3.
“The main driver of today’s upgrade is the industrywide demand environment,” Barclays analyst Oliver Sleath said in a note to investors, adding that a “strategic transformation” across Ryanair’s network and product is providing further momentum and helping the Irish carrier to outperform peers.
Chief Executive Officer Michael O’Leary has sought to broaden the carrier’s customer appeal by refining its sales pitch and offering a range of paid-for extras to entice more business passengers and families.
Ryanair had the biggest intraday gain since Nov. 3, and was trading up 6.6 percent at 13.83 euros at 10:12 a.m. in Dublin, where it is based, taking gains this year to 47 percent.
The carrier, which said in July annual earnings would be in the range of 940 million euros to 970 million euros, also increased its full-year traffic target 1 percent to 104 million passengers. Third-quarter fares should hold steady, it added, dropping a prior forecast of a 4 to 8 percent decline.
Still, full-year results remain “heavily dependent” on sales through the third and fourth quarters, Sorahan said, with additional capacity and lower fuel prices likely to prompt a fare war as carriers fight to attract passengers.
EasyJet, Europe’s second-biggest discount airline, lifted its fiscal-year forecast to a range of 675 million pounds to 700 million pounds ($1.03 billion-$1.07 billion) from 620 million pounds to 660 million pounds. Flights from Britain were encouraged by a damp summer that saw weather stations in the south-coast holiday counties of Sussex, Hampshire and Dorset report record August rainfall, according to the U.K. Met Office.
Lufthansa CEO Carsten Spohr said Sept 4. the airline’s 2015 goal of achieving an adjusted operating profit above 1.5 billion euros is within sight after the “best summer ever.”
International Consolidated Airlines Group SA, parent of British Airways and Spain’s Iberia, said in July that full-year earnings should exceed 2.2 billion euros.