Profits down but Ryanair hits new high

Budget airline Ryanair today posted a 14-per-cent drop in profits, but said passenger numbers had hit a new high.

Budget airline Ryanair today posted a 14-per-cent drop in profits, but said passenger numbers had hit a new high.

The Dublin-based no-frills carrier said pre-tax profits in the year to March 31 were down to 228.5 million euros (£152.1 million) from 264.5 million euros (£176.1 million) the year before.

Ryanair said price 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 per cent to more than 23 million.

The chief executive Michael O'Leary said Ryanair had significantly lowered fares while maintaining a "world leading" after-tax profit margin of more than 20 per cent.

"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 per cent 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 (£1.53 million).

The airline said "a lot of hysteria" had been generated in recent weeks about higher oil prices.

It said it did not expect increases to damage or slow the growth of low fare air travel.

It added that it believed higher prices would "only hasten the demise of some of the current wave of loss-making start-ups and high fare flag carriers".

It said it would absorb any hikes by cutting costs in other areas and pledged that it would not impose fuel surcharges on customers.

The airline added that it believed oil prices would fall this winter or next year.

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.

"As more and more airports compete to win our business, costs will fall because the existing competition rules allow publicly-owned airports to compete on a level playing field with privately-owned airports," Mr O'Leary said.

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.

Ryanair said the new Italian and Spanish bases were performing extremely well, with current bookings indicating that load factors at both bases would top 85 per cent during the summer.

The group said it was keeping its outlook for the coming 12 months "very conservative".

It said it expected passenger growth of about 20 per cent, although seat capacity would only rise by 16 per cent due to failure to agree lease terms with aircraft leasing company ILFC regarding jets formerly run by Buzz.

Ryanair said current load factors - how full its aircraft are - were higher than this time last year.