"Changing your customer experience takes some time," Chief Financial Officer Howard Millar said in a telephone interview.
"The feedback is very positive, particularly in relation to things like allocated seating, which is going well and hasn't impacted turn-around times."
Ryanair rose as much as 9.1 per cent to 6.93 euros, the biggest intraday jump since May 2013, and traded at that price at 12:09 p.m. in Dublin. The shares have gained about 10 per cent this year, valuing the airline at 9.58 billion euros.
"There had been a lot of uncertainty about Ryanair pricing through the summer, and we expect the market to take this fare commentary very positively," Barclays analyst Oliver Sleath said in a note to investors on Monday.
The airline said it aims to fly 84.6 million passengers this year, while boosting the load factor by 2 per cent. Ryanair will lease seven planes over the summer and ground 20 fewer jets during the winter, Millar said.
The outlook for this year depends on yields in the second half, for which the airline has "zero visibility' at this stage, Ryanair cautioned. Traffic gained 4 per cent in the second half of last year as the load factor gained 1 per cent, Ryanair said. Sales climbed 3 per cent to 5.04 billion euros.
The Irish carrier and discount rival EasyJet are looking to expand their networks as former flag carriers undertake the latest revamps of their short-haul units. Deutsche Lufthansa AG and Air France-KLM Group have bolstered European offerings and British Airways-owner International Consolidated Airlines Group SA has bought new planes for Spanish unit Vueling.
In pursuit of a target to fly 110 million passengers by 2019, Ryanair added eight bases in fiscal year 2014, while also boosting its presence at primary airports in cities such as Athens, Rome and Lisbon. It will base aircraft in Warsaw and Gdansk, Poland, as well as Cologne, Germany, later this year.
''Our experience is, moving into markets, the lowest-cost producer always wins,'' Millar said. ''We're not concerned about it. There is always some kind of fare war.''
Targeting business passengers and customers seeking better service, the carrier has introduced fully-allocated seating, trimmed baggage fees and simplified its website. It also plans to boost marketing spending by 25 million euros this year.
A new offering in the second half will introduce perks such as fast-tracked security and same-day flight changes, Ryanair said.
That's a marked shift for CEO O'Leary, who has prided himself on using media coverage of outlandish publicity stunts to grab passenger attention.
A boost in advertising and marking spending, along with higher charges at primary airports and the cost of leasing aircraft in the summer, will cause non-fuel expenses to climb about 5 per cent this year, Millar said. Unit costs overall are projected to remain flat.
After winning BBB+ credit ratings from Standard & Poor's and Fitch, Ryanair is exploring a seven-year Eurobond of at least 500 million euros, which it will aim to complete within ''the next couple months," Millar said.
Ryanair agreed to buy five more Boeing 737-800s last month, bringing its total order book to 180 jets valued at $16 billion at current list prices. The company will take delivery of 21 jets, up from 17, between this September and July 2015.
Fuel and currency hedging will deliver cost savings of about 70 million euros in 2015, Ryanair said. The carrier is 13 per cent hedged for fiscal-year 2016 at $94 per barrel, it said.
- Bloomberg
