Fall in Profits for No-Frills Airline
By Phil Waller, City Staff, PA News
Budget airline Ryanair today posted the first fall in its net profits since it floated in 1997.
The Dublin-based no-frills carrier said pre-tax profits in the year to March 31 had fallen 14% to 228.5 million euros (£152.1 million) from 264.5 million euros (£176.1 million) the year before.
Ryanair said competition, the Iraq war, a weaker pound, higher oil prices and the threat of terrorist attacks had all contributed to adverse market conditions during the year.
But it said passenger numbers during the year had nevertheless grown by a record 47% to more than 23 million.
In May, it carried 2,170,381 people, up 18.7% from last year’s 1,828,454.
Chief executive Michael O’Leary told reporters that the firm was considering a number of revenue-boosting initiatives such as in-flight entertainment screens, which passengers would pay to watch.
If the scheme goes ahead, Ryanair hopes to launch it next summer, with the company’s new 737-800 jets likely to be the first to get the seat-back screens.
Mr O’Leary said Ryanair had significantly lowered fares while maintaining a “world leading” after-tax profit margin of more than 20%.
“These results demonstrate yet again what a superb job the 2,300 people of Ryanair do in both good times and bad,” he said.
Ryanair said pre-tax profits had fallen 5% to 226.6 million euros (£150.8 million).
That excluded the 14.9 million euros (£9.9 million) cost of the earlier-than-planned retirement of six Boeing 737-200 jets, a 2.7 million euros (£1.8 million) charge for reorganising the recently acquired Buzz airline and goodwill costs of 2.3 million euros (£1.53m).
The airline said it did not expect rises in oil prices to damage or slow the growth of low fare air travel.
It said it would absorb any hikes by cutting costs in other areas and pledged not to impose fuel surcharges on customers.
Ryanair said regulatory battles such as its recent dispute with the European commission over subsidies from the publicly-owned airport at Charleroi in Brussels would prove to be “temporary obstacles”.
The airline said it was confident it would win its appeals on Charleroi and another dispute involving Strasbourg airport.
During the year, the airline opened two new bases at Rome Ciampino and Barcelona Girona and launched 73 new routes, boosting its network to 150 routes.
Current bookings indicated load factors at both new bases would top 85% during the summer.
The group said it was keeping a conservative outlook for the coming 12 months.
It said it expected passenger growth of about 20%, although seat capacity would only rise by 16% due to failure to agree lease terms for jets formerly run by Buzz.
