Ryanair ups full year profit outlook

By Andras Gergely and John Bowker

DUBLIN/LONDON (Reuters) - Irish airline Ryanair on Monday raised its full-year outlook to a profit due to lower fuel costs, and forecast further substantial profit next year as travellers trade down in the recession.

Europe's largest low-cost carrier said its full-year guidance was for a net profit in the 50 million to 80 million euros range versus an earlier projection of break-even, despite a 101.5 million euro (89.9 million pound) loss in the third quarter to end December.

"We're not satisfied with a loss in the third quarter but we are happier with the outlook ... after a modest profit this year we expect a return to more substantial profit next year," Deputy CEO Michael Cawley told Reuters in an interview.

Ryanair shares were up 4.5 percent at exactly 3 euros a share by 9:49 a.m., valuing the carrier at 4.4 billion euros.

It followed an increase in profit forecasts last month by rival low-cost operator easyJet, while pricier carriers British Airways and Air France-KLM both issued profit warnings.

"The longer and deeper this recession, the better it will be for the lowest cost producers in every sector," Chief Executive Michael O'Leary said in a statement.

FUELLING RECOVERY

Ryanair's third quarter loss was a result of a fuel hedging strategy that saw it lock in fuel costs at over $1,100 a tonne as oil prices fell, but Cawley said it had hedged 75 percent of its fuel in the first half of 2009/10 at $660 tonnes.