31/05/2005

Ryanair announces rise in profits

Budget airline Ryanair has announced a 19% rise in profits and said that it remains “confident” about the year ahead.

The Dublin-based airline, which was founded 20 years ago, announced net profits of 268.9 million euros today. The company also said that passenger volumes had also increased by 19%, to 27.6 million.

However, average yields (revenue per passenger) only increased by 2%, despite a 16% rise in capacity. Ryanair said that this was partly due to the lower comparables last year (when yields fell by 14%) and continuing capacity reductions by the European flag carriers in markets where they competed against Ryanair. However, the airline said that most of the yield growth was due to multiple fuel surcharges imposed by other carriers on short-haul passengers. Ryanair said that their traffic growth and yields had “benefited substantially” from not imposing fuel surcharges.

Ryanair warned that fuel costs remained high and said that the market was “volatile”. However, the company said that as it was not hedged for the remainder of the summer it stood to benefit from the recent oil price declines. However, Ryanair said that it planned to budget for the volatile winter period, by hedging 75% of next winter’s fuel requirement at rates equivalent to $47 per barrel.

Ryanair also said that advance bookings for the summer months were “strong” and that they had raised their traffic growth forecast for the coming year from 34 million to 35 million as a result.

Commenting on the results, chief executive Michael O’Leary said: “Our outlook for the coming 12 months is more positive than it was this time last year. It is becoming increasingly clear that being the lowest cost operator is the key competitive advantage in our industry. We remain confident that Ryanair’s unique combination of lowest costs, direct flights, brand new aircraft and market leading punctuality will ensure that the travelling public continues to fly Ryanair for the next twenty years, just as enthusiastically as they have in our first twenty.”

(KMcA/SP)

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