London, 3 March (Argus) — Budget carrier Ryanair said its February traffic rose by 5pc from a year earlier to 4.57mn passengers. Its load factor, or number of passengers as a percentage of seats available, inched up by 1pc to 76pc.
Passenger traffic increases are crucial to airline profitability this year amid rising jet fuel prices, according to the International Air Transport Association (Iata). The group yesterday lowered its profit expectations for the year, but revised its passenger expectation upward.
The association raised its 2011 average price assumption for Brent crude by $12/bl from its previous forecast to $96/bl, which it said will cost airlines worldwide an additional $10bn.
Iata has warned that surging oil prices could eviscerate airline profitability and other airlines in the US, Europe and Asia-Pacific have added or increased fuel surcharges to ensure profitability, but Ryanair has flaunted its refusal to implement them.
Ryanair spokesman Stephen McNamara said passengers would “switch from high fare, fuel surcharging rip-off airlines or tour operators” that used fuel surcharges. Airline chief Michael O'Leary has said previously that fuel surcharges from other airlines would enable Ryanair to increase its fares and market share.
But the Irish carrier has increased its jet fuel hedging programme this year. It is 90pc hedged at $750/t for the fourth quarter of its 2011 fiscal year and 80pc hedged for fiscal year 2012 at an average price of $800/t. Argus recently assessed spot jet cargo prices at $1,057/t.
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