Ryanair profits soar to record

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The Independent Online

Budget airline Ryanair today announced record half-year profits, but said it remained cautious about the rest of the year.

The Dublin-based carrier said profits after tax in the half year to September 30 climbed 15% to 201.3 million euros (£139.8 million) while passenger numbers lifted 24% to 14 million.

Ryanair said its low fares strategy had stayed robust in a very difficult economic climate marked by record fuel prices and intense price competition. It added the results represented its 30th consecutive quarter of unbroken profitability.

However, the airline said high fuel costs would affect its future profits guidance.

If the price of a barrel of Brent crude stays at 50 US dollars for the rest of this year, the group said it would incur extra costs of some 55 million euros (£38.2 million).

It added that the high oil prices and "irrational competition" may speed up its prediction of a "bloodbath" in the industry and airline casualties this winter.

Chief executive Michael O'Leary said the group remained cautious in its outlook for the remainder of the tax year, but that the airline expected to achieve significant increases in passenger volume growth.

"With the lowest cost base, we believe Ryanair will continue to grow profitably," he said.

Ryanair said the 5 per cent decline in its yield, or income per passenger, was at the better end of its minus 5 per cent to minus 10 per cent guidance, which it attributed to a mix of slightly better peak summer yields and the initial impact of the fuel surcharges imposed by some of the group's rivals.

Unit costs remained flat for the first half due to higher fuel and route charges, which rose at a much faster rate than traffic growth.

However, the group cut all other unit costs by 4 per cent due to the addition of more cost- efficient Boeing 737-800 jets, new lower cost airport deals and continued tight control of other costs.

Ryanair said it "regretted" that Irish transport minister Seamus Brennan had been moved to a new portfolio, saying he had spent two years trying to introduce "real competition" at government-owned Dublin Airport.

"We hope the new minister will move quickly to promote the development of competing independent terminals at Dublin Airport," Mr O'Leary said.

Ryanair added that it was continuing its "disciplined route growth", with its two new bases at Barcelona and Rome exceeding expectations, as had the group's 41 other routes launched this summer.

Its expansion would continue this winter, with Rome and Milan each getting two more jets and Frankfurt, Stockholm and Glasgow getting one extra aircraft each.

The fleet at London Luton would rise to four jets from one. This winter will also see the airline opening five destinations including Latvian capital Riga, Santander and Seville in Spain and Porto in Portugal.