Ryanair today voiced confidence that it will win approval from European regulators for its €694 million bid for rival Aer Lingus.
Ahead of an expected response in March from the European Commission, the no-frills airline’s chief executive Michael O’Leary said: “Ryanair has submitted a radical and unprecedented remedies package to the EU in support of its offer for Aer Lingus.
“The remedies involve two upfront buyers each basing aircraft in Ireland to take over and operate a substantial part of Aer Lingus’ existing route network and short-haul business.”
Flybe said last week that it would consider taking over some of the Aer Lingus routes where the carriers have a duopoly if regulators gave the green light to the deal. Ryanair last week offered to give up 46 short haul routes to Flybe and British Airways – half of Aer Lingus’s short haul network – in order to secure the takeover.
Ryanair owns almost 30% of Aer Lingus and renewed an attempt to buy the rest last summer. The EU blocked a takeover attempt five years earlier, saying it would create a monopoly for Irish flights.
The development came as the no-frills carrier raised its full-year profit guidance amid higher travel demand in the third-quarter.
The carrier aims for net income of almost €540 million for the year ending March 31, against a previous target of €490 million to €520 million.
Profit for the three months ending December 31 came in at €18.1 million, up from €14.9 million a year earlier.
Average fares rose by 8% in the third quarter as the airline passenger numbers increased by 3% to 17.3 million.
Sales in the three months were up by advanced 15% to €969 million, while the airline’s fuel-bill soared by 24% to €81 million.
Chief financial officer Howard Millar said: “We had strong pre-Christmas bookings and that boosted average fares and that meant we performed better than expected,”
He added that the airline is not planning to buy new aircraft for 12 to 24 months.
The airline opened its 51st base in Maastricht in December and is planning to add six more in locations including Zadar, Croatia and Fez, Morocco from April.
O’Leary said: “Our Q3 profit of €18m was ahead of expectations due to strong pre-Christmas bookings at higher yields.
“The 8% rise in average fares reflects our improved customer service, record punctuality and the successful roll out of our reserved seating service.
“Our fuel costs rose €81 million, (+24%), slightly less than expected as oil prices increased 22%.
“Excluding fuel, Q3 unit costs rose 4% due to excessive increases in Italian ATC costs, Spanish airport charges, and the strength of sterling to the euro.
“Ancillary revenue performed strongly and rose 24% to approximately €13 per passenger.”
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