×

Business looking 'scarily good' right now: Ryanair CEO

Amid lower fuel costs, increasing passenger numbers and a rise in profit forecasts, things have never looked so "scarily good" for Ryanair, its CEO Michael O'Leary told CNBC Monday.

"Everything is so good it's worrying," O'Leary told CNBC Europe's "Squawk Box" Monday.

"We're raising the full-year traffic forecasts, we're raising the profit forecasts, the key number is that we've hedged 95 percent of next year's oil at a saving of about 430 million euros ($474.1 million) and we're heading for about 1.2 billion euros in profits this year."

Ryanair on Monday said it expects to post annual profits at the upper end of its forecast range as fuller-than-expected planes lift passenger numbers.

The Irish airline raised its full-year profit forecast by 25 percent in early September on a summer performance boosted by bad weather in northern Europe and the strength of the British pound.

"Our concern at the moment is not a competitive one, our costs are under control (unit costs are down 6 percent this year)," O'Leary told CNBC.

Ian Waldie | Getty Images News | Getty Images

"It's more a case of what's going to happen, like some extraneous event that always befalls the airline industry when it looks this good."

Similarly to the shipping industry, the airline industry has been prone to upping capacity during the good times, only to regret it during an economic slowdown. O'Leary thought there was a risk of over-capacity but that this was dependent on the Asian market.

"What's different this time round is that capacity has been reasonably disciplined in Europe. Most of the orders in the last five years have been going to places like Asia, Russia and Latin America. Now if some of those (markets) screw up and they (the aircraft) find their way back into Europe then there may be some capacity pressures here in Europe but...for us, the industry never looked so scarily good."

On Monday it said it expects to be at the upper end of that 1.175 billion to 1.225 billion euro ($1.30-$1.35 billion) range and increased its forecast passenger numbers for the year to the end of March to 105 million from 104 million.

"We have enjoyed a bumper summer due to a very rare confluence of favorable events including stronger sterling, adverse weather in northern Europe, reasonably flat industry capacity and further savings on our unhedged fuel," Chief Executive Michael O'Leary said.

O'Leary said he expects Ryanair to be flying 180 million passengers by 2024, up from an earlier forecast of 160 million, due to the lower rate of empty seats.

British Airways owner IAG Lufthansa and Air France-KLM have all reported strong quarterly results on strong demand for summer travel and cheaper fuel.