Ryanair continues to deliver stellar profitability in a very tough environment while competitors struggle to restore profitability in the European short-haul market, announcing a Q1 operating profit of €132 million and net profit of €99 million down 29% vs. 2011 on revenues of €1.284 Billion carrying 22.5 million passengers up 6% with a load factor of 82% down 1% with cash reserves of €3.808 billion.
The Ryanair CEO Michael O’Leary stated “Ryanair continues to grow its traffic across Europe while maintaining the lowest unit costs in the airline industry, and generating healthy profits as evidenced by the 8% after tax margin achieved in the first quarter, We continue to see significant opportunities to grow across Europe as many airports aggressively compete to attract Ryanair’s traffic growth”.
The carrier’s ancillary revenues continue to grow strongly up 15% to €285.9 million in the long-term ancillary revenue is expected to account for 20% of total revenues, however Ryanair like other carriers is not immune from high fuel costs which are a drag on costs/profitability in Q1 it’s fuel costs increased by 27% to €543.8 million now accounting for 47% of total operating costs versus 43% in 2011.
On the Conference call the CEO signalled the situation is very fluid regarding new bases/routes as discussions with airports and governments continue , and expects the winter scheduled to be bedded down by late September/Early October, however the airline flagged further expansion for Budapest
The airline will take delivery of 11 new Boeing 737-800s in quarter three and four completing the delivery programme and stated in Q1 it increased the net leased fleet from 51 to 55 aircraft and returned four aircraft to lessors.
The Ryanair CEO Michael O’Leary stated the on-going recession and high fuel costs will continue the consolidation process in Europe , thus creating new opportunities for Ryanair as was case last winter following the collapse of Malev Airlines and Spanair with available aircraft it’s positioned to seize opportunities as they arise in an ever changing environment.
Irish Aviation Research Institute © 31st July 2012
