Ryanair show 'strong growth' in Q1 results

Ryanair has announced its biggest increase in first-quarter profits today – boosted by its highest-ever quarterly passenger volume.

The Irish low-cost airline reported that profits had surged significantly ahead of expectations, jumping 68% to €39 million, while passenger traffic rose by over a third to 3.54 million. Ryanair said that this was the first quarter the company recorded over one million fares for three consecutive months and that this was largely due to a 7% reduction in average airfares.

Total revenues for the quarter grew by 29% to €194.3 million, however, this was accompanied by a corresponding 22% rise in operating expenses – bumping that figure up to €148.9 million.

Ryanair’s CEO, Michael O’Leary, said the increase in quarterly profits was a result of "the key elements of our unique low fares model".

He added: "There is no doubt that the tumultuous events in the airline industry over the past 12 months have created huge new growth opportunities. Ryanair leads the low fares market in Europe by some considerable distance, as our average fares are over 50% lower than those of Easyjet/Go.

"Our strong organic growth continues and we enjoy a surplus of new route and new base opportunities."

He said that traffic growth during Q1 was "outstanding", with high load factors on all 10 routes to and from their newly instituted German base at Frankfurt Hahn and their eight new routes operating out of London Stansted.

In view of these results, Ryanair now plans to open at least one new base in Europe each year for "the next three or four years", and forecasts growth at 30% for the next two years – to just under 20 million passengers in 2003-2004.

Ryanair also announced an agreement with Boeing to convert three of their rolling 50-option aircraft into firm deliveries during spring 2003 – bringing to 13 the total of new aircraft to be delivered in advance of summer 2003.

In his summation of the results, Mr O'Leary had strong words for bitter German rival Lufthansa, saying: "Despite the protestations of Lufthansa – who continue to predict that low fares won’t work in Germany – Ryanair enjoys load factors of over 80% on our 10 routes to and from Frankfurt Hahn. We will continue to expand in this market where Ryanair is now Germany’s largest low-fares airline."

(GMcG)