Ryanair posts 20% rise in profits
Monday 07 November 2011
Low-cost airline Ryanair announced a jump in profits today but said passenger numbers will fall 10% this month as it grounds more planes this winter.
The Dublin-based operator posted profits of 544 million euro (£467.5 million) in the six months to September 30, an increase of 20%, as a 13% rise in average fares helped it offset a 37% hike in fuel costs.
The company is pulling 80 of its aircraft to reduce winter losses amid soaring fuel prices and expects traffic to fall 4% in the second half, with 500,000 fewer passengers flying in November.
The strategy will improve its full-year profit forecasts by 10% to 440 million euro (£378.2 million), reflecting a boost to its margins.
Ryanair, which has a fleet of 272 planes, said average fares rose as a result of a better mix of new routes and as competitors put up their prices in response to higher costs.
Revenues were up 24% to £2.7 billion, while passenger numbers rose 12% to 44.7 million.
Outspoken chief executive Michael O'Leary also hit out at BAA's decision to call for a judicial review into a ruling that it must sell Stansted Airport as "pointless".
He said: "These delays allow BAA Stansted to continue to charge excessive fees and generate monopoly profits, even as Stansted's traffic declines from less than 24 million passengers in 2007 to less than 18 million in 2011."
He called on the Competition Commission to end the "interminable delays" and force an early sale of the airport.
Comparisons with the previous year were aided by the disruption caused by the Icelandic ash cloud in 2010, which resulted in flight cancellations.
Revenues from additional charges rose 15% to 487 million euro (£418.6 million), after it extended a reserve seating trial from 40 to 80 routes.
Today's results represent an improved performance on the first quarter when profits rose 1% to 139.9 million euro (£120.2 million).
Ryanair recently outlined ambitious plans to almost double the number of passengers it carries and stretch its reach across Europe.
Mr O'Leary is reportedly aiming to increase passenger numbers to as much as 130 million over the next decade, up from 72.1 million in 2010/2011. This would make it one of the biggest airlines in the world.
Ryanair believes that higher fuel costs could work in its favour by forcing competitors to cut capacity and routes and drive demand for budget airlines.
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