Massive leap in Ryanair profits

Tuesday, 06 Aug, 2002 0

Ryanair today reported that its profits have jumped by a record 68% to 39million Euros (£24.2million) during the three months to June 30 and revealed that it intends to open at least one new European base “each year for the next three or four years.”

Passenger numbers during the period rose by 38% to 3.54m, making it the the first quarter in the carrier’s history when over 1million passengers were carried each month. The no-frills airline said this was largely due to a 7% reduction in average air fares.

Average load factors for the quarter rose from 77% to 83% with Ryanair revealing that it was now seeing load factors of over 80% on its 10 routes to and from Frankfurt Hahn.

Chief executive Michael O’Leary said: “This record increase in Ryanair’s quarterly profits is a direct result of the key elements of our unique low fares model. Firstly very strong traffic growth in all our new and existing markets, secondly extremely disciplined cost-management, and thirdly using these lower costs to drive down airfares for our customers.”

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. We expect to open at least one new base in Europe each year for the next 3 or 4 years, as we grow at a disciplined and controlled rate to the benefit of our customers, our shareholders and our staff.”

However Mr O’Leary warned that the high profit growth seen in Q1 would not be repeated in the second quarter of the year, pointing out that “ much of this exceptional profit growth is due to the impact of the launch costs of many new routes in the corresponding Q1 last year.”

The airline is also likely to face increased competiton as a result of the easyJet/ Go merger which was completed last week.