Irish low-cost carrier (LCC) Ryanair reported a full-year net profit of €1.3 billion ($1.5 billion), up 6% from a €1.2 billion net profit in the year-ago period.
The airline said the 20% margin for the full year ended March 31 was achieved through the third year of its latest turnaround strategy, even after a 13% cut in average fares.
Ryanair CEO Michael O’Leary said the LCC managed to post improved results, despite “difficult trading conditions,” including security events at European cities, a switch of charter capacity from North Africa, Turkey and Egypt to mainland Europe, and a sharp decline in the UK pound following the UK’s June 2016 vote to leave the European Union (Brexit).
“We reacted to these challenges by improving our customer experience and stimulating growth with lower fares,” O’Leary said.
Revenue rose 2% to €6.6 billion, with ancillary revenues up 13% at €1.8 billion (27% of the total). Expenses increased 1% to €5.1 billion, producing an operating profit of €1.5 billion, 5% higher than the €1.4 billion operating profit in the prior year.
Total passenger seats sold for the year rose 13% to 120 million, producing a load factor of 94%, up 1 point. Average fares—including checked luggage fees—fell 13% to €41, while cost per passenger (including fuel) fell 11% to €43. Unit costs ex-fuel were down 5%. 
For the incoming April 2017-March 2018 financial year, Ryanair is expecting 8% traffic growth, taking it to 130 million seats sold with load factor remaining stable at 94%. The airline’s fleet will grow to 427 aircraft by March 2018.
Ryanair said 2017-18 yields are expected to fall by 5%-7% (-5% in the first half and -8% in the second half) because of the weakness of the pound and continued excess capacity in Europe.
“Ancillary revenue per customer will likely be flat as we continue to drive penetration with discounts,” Ryanair said, although the airline added that ancillaries are on track to hit to 30% of total revenues by March 2020.
On the cost side, fuel prices are forecast to drop €70 million, although Ryanair will use this gain to lower its fares. Overall ex-fuel costs are predicted to be down 1%.
This should deliver a €1.4-€1.45 billion net profit for the 2017-18 financial year, up 8% on 2016-17, although this remains subject to Brexit, security events and air traffic controller strikes.
In the longer term, Ryanair is expecting its customer total to grow to 142 million in 2019 with a fleet of 448 aircraft (9% growth), 152 million in 2020 with 481 aircraft (7% growth), 162 million in 2021 with 516 aircraft (7% growth), 175 million in 2022 with 540 aircraft (8% growth), 189 million in 2023 with 575 aircraft (8% growth), and to 200 million by 2024 with 585 aircraft (6% growth).