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Ryanair's profits hold steady as revenue takes off

The airline’s after-tax profit is up by around 1 per cent, but its revenue is up 29 per cent as fares also go upward.
Jul 25th 2011, 10:08 AM 262 7

Updated, 14.04

RYANAIR HAS ANNOUNCED an after-tax profit of €139.3 million for the months of April to June, as increased passenger numbers and an increase in fares led to a surge in revenue.

The airline took in over €1.15bn in revenue for the first quarter of its financial year, up by 29 per cent on the same period in 2010 – when its €897m revenue was blighted by airspace closures due to the Icelandic ash cloud.

Average fares were also up, by 11 per cent, though the increased revenue was cancelled out by increased operating costs, including a surge in the price of airline fuel.

Overall the airline’s profits were up by 1 per cent on the same period from last year, a performance chief executive Michael O’Leary said was “testimony to the strength of Ryanair’s lowest fares-lowest cost model, which continues to deliver profit and traffic growth”.

The airline maintained its forecast of around €400m in profit for the year ending March 2012, saying it had hedged 90 per cent of its oil requirements at $86 a barrel – significantly less than the current price of $118.

The airline’s release also took another shot at Dublin Airport, with O’Leary saying he expected traffic to fall at the airport in 2011 despite the opening of its new second terminal:

We expect Dublin Airport’s traffic to fall in 2011 – its fourth consecutive annual fall – due to the DAA’s unjustified 40 per cent increase in airport charges, which has led to winter capacity cuts by Ryanair and may other carriers operating to Dublin.

A spokesman for DAA described these claims as “spurious”, saying the increase in charges amounted to 12 per cent and that the airport remained competitive, as shown by independent bodies.

The spokesman cited a Jacobs consultancy statistic that showed Dublin’s charges as “towards the lower end of the spectrum” in Europe, and added that passenger traffic in Dublin was up by 6 per cent so far this year.

Analyst Stephen Furlong of Davy stockbrokers said the likely sale of Stansted Airport, Ryanair’s new base at Manchester and a memorandum of understanding to buy aircraft from a Chinese manufacturer had all shown the flexibility of Ryanair’s business model.

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Gavan Reilly

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