Ryanair profits rise by 16% as fares reduced by 12%

Economy airline Ryanair posted a record net profit growth of 16% to £120 million (euro 176 million) as traffic increased by 45%, fuelled by a 12% fare decrease.

Ryanair increased the number of passengers carried from 7.8 million in 2002 to 11.3 million this year in the six months to September 30. In the same period revenue increased from euro 464.6 million to euro 596 million, this represented a 28% increase. However, profits were offset by a 32% increase in operating expenses leaving net profits after tax up from euro 150.9 million to euro 175.5 - an increase of 16%.

Ryanair’s Chief Executive, Michael O’Leary said: “These results demonstrate another strong performance from Ryanair’s low fares model which continues to grow profitably in adverse market conditions across Europe. The strength of our traffic and profit growth, as well as the exceptional margins, once again proves our doubters wrong".

However, Mr O'Leary cautioned: “Having increased seat capacity this Summer by over 50% and launched so many new routes it was inevitable that load factors would decline - as predicted - from last year’s record levels. Most of these new routes have performed extremely well and we are now running slightly ahead of our expectation of a 5% load factor decline for the year. Although yields continue to be softer than we expected we will continue to drive down fares in all markets, whilst offering more choice, better service and lowest ever prices to our customers."

Ryanair has expanded significantly, buying new aircraft and bringing on stream new routes.

“At a time when many European airlines are announcing losses or steep falls in profits, Ryanair is continuing to grow profitably," said Mr O'Leary who announced 13 new routes.

Referring to difficulties with the European operations, Mr Ryan said he remained "confident that Commissioner de Palacio will put in place a framework that will encourage and enable publicly owned airports such as Charleroi and Strasbourg to compete on a level playing field with the many privately owned airports around Europe".

The European Commission have launched an investigation into the operation of the Ryanair hub in Charleroi, Belgium and the company have appealed a decision by a French court that found the Strasbourg operation amounted to illegal state aid.

(SP)