Ryanair reports record profits
No-frills airline Ryanair said profit and revenue rose in the year to March 31st, as rising fares and passenger numbers helped offset the rising cost of fuel, but warned that profit would fall in the coming year as the economic slowdown continues.
Profit rose by 25 per cent to €503 million and revenue was €4.3 billion, an increase of 19 per cent compared to the previous year.
The airline carried 5 per cent more passengers, bringing the year's total to 75.8 million. Although Ryanair grounded up to 80 aircraft in winter, it opened six new bases and added 330 new routes over the year.
The company has moved to take advantage of gaps in the market left by airlines that have ceased operation over the year, including Hungary's Malev and Spanair. Meanwhile, IAG has indicated that UK airline BMI Baby will be closed if efforts to sell it come to nothing.
"We expect more European failures in 2012, as higher oil prices and recession continues to expose failed airline models as well as subscale or peripheral carriers," chief executive Michael O'Leary said in a statement.
While average fares were up 16 per cent, unit costs showed 13 per cent growth as fuel costs rose by 30 per cent land sector length was 6 per cent higher.
Mr O'Leary predicted further airline failures as a result of rising fuel prices.
However, Ryanair is expecting its own traffic to rise by 5 per cent next year, bringing its total passengers to 79 million.Most of that growth will be in the first half of the year, when traffic will grow 7 per cent, followed by a 3 per cent rise in the second half.
With fuel prices expected to continue current trends, Ryanair said it expected a fall in profit in the first quarter
"We remain concerned about next winter as we have zero yield visibility but expect recession, austerity, currency concerns and lower fares at new and growing bases in Hungary, Poland, Provincial UK, and Spain will make it difficult to repeat this year’s record results," Mr O'Leary said."We expect that any increase in fares will only partially offset higher fuel costs."
The airline said profit would be in the range of €400 million to €440 million.
Ryanair said it was proposing the payment of a special dividend of 34 cent per share in November, amounting to a total of €483 million.