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02/11/2009
Ryanair See Soaring Profits Rise 80%
Budget airline Ryanair has revealed a rise in first-half profits by 80% for the year.
Releasing the figures today, the company said its first half results were so strong it could reverse its long-standing strategy of rapid growth and instead distribute cash to shareholders.
The company said its second-quarter profit rose 35% by spending spent less on fuel, while net income in the three months ending in October increased to €250.5 million ($370 million) from €185.8 million a year earlier.
Other figures released by the budget airline included a 17% decrease in the average fare cost, which now stands at €39.
Ryanair's Chief Executive Officer Michael O'Leary said the results were due to the company's model and "relentless cost discipline".
However, despite the initially impressive figures, Mr O'Leary conceded there was some "distortion" inflating the results.
"These results are heavily distorted by a 42% fall in fuel costs, which has masked a significant 17% decline in average fares," he said.
"We expect average fares to decline by up to 20% during Quarters 3 and 4, which will result in both these quarters being loss making.
"Despite this our full year guidance remains unchanged and will be substantially profitable, at a time when many of our competitors are losing money, consolidating or going bust."
Mr O'Leary contended that market conditions in Ireland, the UK and Europe continued to be difficult, and were "characterised by an absence of consumer confidence".
He added that while fuel remained volatile, the budget carrier had continued to reduce airport and handling costs, through web check-in initiatives, and staff costs, with a pay freeze in both the current and coming year.
(DW/BMcC)
Releasing the figures today, the company said its first half results were so strong it could reverse its long-standing strategy of rapid growth and instead distribute cash to shareholders.
The company said its second-quarter profit rose 35% by spending spent less on fuel, while net income in the three months ending in October increased to €250.5 million ($370 million) from €185.8 million a year earlier.
Other figures released by the budget airline included a 17% decrease in the average fare cost, which now stands at €39.
Ryanair's Chief Executive Officer Michael O'Leary said the results were due to the company's model and "relentless cost discipline".
However, despite the initially impressive figures, Mr O'Leary conceded there was some "distortion" inflating the results.
"These results are heavily distorted by a 42% fall in fuel costs, which has masked a significant 17% decline in average fares," he said.
"We expect average fares to decline by up to 20% during Quarters 3 and 4, which will result in both these quarters being loss making.
"Despite this our full year guidance remains unchanged and will be substantially profitable, at a time when many of our competitors are losing money, consolidating or going bust."
Mr O'Leary contended that market conditions in Ireland, the UK and Europe continued to be difficult, and were "characterised by an absence of consumer confidence".
He added that while fuel remained volatile, the budget carrier had continued to reduce airport and handling costs, through web check-in initiatives, and staff costs, with a pay freeze in both the current and coming year.
(DW/BMcC)
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