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Ryanair announces drop in profits

Airline suffers from fuel costs

June 2, 2009


Leading low-cost airline Ryanair has revealed today net profits of €105 million; a figure that, although exceeding industry expectations, has been hit hard by the increase in fuel prices and by having to write down the value of its stake in rival Aer Lingus.

Despite the drop in profits, Ryanair has successfully grown to become the largest European airline, having overtaken Air France, British Airways and Lufthansa's passenger numbers and market capitalisation. In fact, from the period March 31, 2008-March 31, 2009, the airline saw a 15% growth in passenger numbers to 58.5 million.

Ryanair's CEO, Michael O'Leary, commented on the results: "Despite the global recession and record high oil prices, Ryanair's lowest fare/lowest cost airline services again delivered traffic growth and profitability which demonstrates the fundamental strength of the Ryanair model.

"To deliver a net profit of €105 million (although a disappointing €376 million decline over last year's figure) was a robust performance during a year of record high oil prices when our fuel bill jumped by €466 million (up 59%).

"The recession and declining consumer confidence is proving to be good for Ryanair's growth, as millions of passengers switch to our lower fares. All our major competitors have reported material reductions in short-haul capacity and traffic. Ryanair will continue to lower fares to stimulate traffic growth, maintain high load factors and win more short-haul traffic from our high-fare competitors."

The airline also said that it had been forced to write down the value of its 29.8% stake in Aer Lingus by €222 million, following a sharp decline in the value of Aer Lingus' share price.

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