Ryanair stays bullish on growth prospects

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Ryanair has predicted that it will be Europe's fastest-growing carrier over the next five years as new aircraft are delivered and rivals scale back their operations.

Speaking during a briefing on its first-quarter results, Ryanair finance chief Howard Millar predicted that the Irish budget carrier will account for 40% of total new capacity coming online in the period to 2018. With 175 Boeing 737-800s on firm order, Ryanair is to have a fleet of 410 by the end of the financial year ending 31 March 2019, by which time it expects to be carrying 110 million passengers per year.

"We see lots of opportunities, with SAS in retreat [and] LOT Airlines in the ER room again," says Millar. "You have the perennial 'sick man of Europe', Alitalia; you have Iberia that has been reshaped by IAG and Willie Walsh; and Air Berlin is cutting back capacity. Air France going through another restructuring process... Everywhere you go in Europe, there's plenty of opportunity. All of these markets, we believe, will give us opportunity for future growth."

Millar says most of this growth will be in the "big five" economies of Germany, Italy, the UK, Spain and Scandinavia. He highlights Germany as a market that is particularly ripe for Ryanair: "As Air Berlin declines, we would see it as one of the countries on our list for expansion."

Looking at expansion further afield, Millar says that any country on the peripheries of the continent that has signed an open-skies agreement with Europe will be considered for expansion - including Israel, where talks are taking place between Ryanair and the government.

"We think the Israeli market is underdeveloped," he says. "The government [is] proactive in terms of getting more capacity into the market... We think it's an interesting opportunity."

However, as no new aircraft will be delivered to Ryanair until 2015, existing routes would need to be "rejigged" to make way for new services to Israel, and this could not happen until after this winter season.

Ryanair is meanwhile on track to complete by September the "evaluation stage" of a potential order for new Boeing 737 Max aircraft, and aims to sign by year-end a firm deal for up to 200 units.

"We are hoping to report back at the end of September, but so far certainly we believe there will be very significant fuel-cost savings," says Millar. "The weight of the aircraft means there will be extra penalties from Eurocontrol and air traffic charges, so it's really about bottoming out those numbers. Then we get down to the thorny question of money."