Ryanair made a €35 million ($47.2 million) net loss for the third quarter of its financial year compared to a €18 million profit in the same period last year.
The quarterly loss came after revenues per passenger fell 6% and fares dropped 9% due to a “weak pricing environment”.
Excluding fuel, sector length adjusted unit costs fell by 9% while ancillary revenues rose 13%. To offset the fall in yields, Ryanair sought to boost traffic which increased 6% to 18.3 million in the three months ending 30 December 2013..
Chief executive Michael O'Leary says the loss was down to a drop in average fares and a weaker sterling. “We responded to this weaker pricing environment last September with seat promotions and lower fares which stimulated traffic across all markets resulting in 6% growth in Q3, and a 1% rise in monthly load factors,” he says.
The low-cost giant said the loss is in line with previous guidance and predicts it will make a net profit of €510 million for the full year.
Ryanair says it expects fourth quarter yields will decline 8%, slightly better than the 10% decline it previously guided. Unit costs will fall 4% leading it to predict a profit in the range of €500 million to €520 million.
The airline says four new bases in Italy at Rome Fiumicino, Catania, Lamezia, and Palermo and four others across Europe including Athens, Brussels and Lisbon will provide significant growth opportunities in 2014.
“We expect these new bases to provide substantial growth opportunities for Ryanair, particularly as we commence deliveries in September 2014 of our new 175 Boeing 737-800 aircraft order."
Ryanair says it will not deviate from its strategy of lowering prices to stimulate demand and says forward bookings are running ahead of last year, although at a weaker yield.