Ryanair profits up 19% despite charges disputes

Despite a slowdown in passenger growth because of disputes over charges with three airports, low-cost airline Ryanair has continued its strong growth with pre-tax profits up 19 per cent to €90.1 million (€71 million).

The profits were comfortably ahead of market forecasts and Ryanair's share price, after falling in early trading, recovered to close 17 cents higher at €8.22. At this level, the share is trading on a substantial premium to every other European airline and analysts believe that the scale of this premium will probably restrict further gains in the short-term.

Passenger numbers were up 13 per cent to 5.6 million, below Ryanair's own targets and this was attributed to disputes with Manchester, Liverpool and Kerry airports which saw the loss of 400,000 passengers. "Manchester alone cost us 250,000 to 300,000 passengers. We were basically resisting cost increases there but happily we came out with a better deal," said Ryanair's commercial director, Mr Michael Cawley.

The disputes with Manchester and Liverpool have now been settled and Mr Cawley said that with eight new routes beginning this year, the airline expects passenger numbers to rise 25 per cent to seven million.

Ryanair has not announced any new destinations other than the eight announced earlier this year. But Mr Cawley said that Ryanair is already talking about another route out of London and is also having discussions with Prestwick, Paris, Brussels, Stockholm, Frankfurt and Pisa about basing Ryanair aircraft at those airports.

The results from Ryanair included the by-now ritual attack on Aer Rianta over charges at Dublin Airport. Mr Cawley said that passenger traffic between Dublin and London is now stagnating at four million passengers and that for the first time since the Gulf War, there will be fewer passengers carried on the route than the previous year. "Charges were raised to £4.30 a passenger in January and are due to go up to £7.20. That's higher than Heathrow and Gatwick and one-sixth the charges at Manchester. Prices have gone out of control."

Ryanair chief executive Mr Michael O'Leary said: "The Government continues to prioritise the interests of its high-cost airport monopoly over the needs of the Irish consumer and potential European visitors."

Last year, Ryanair revenues were up 25 per cent to €370 million, with operating profits up €16.2 million to €84.1 million. Ryanair maintained its operating margins at 23 per cent - five times higher than margins at Lufthansa, according to Mr Cawley. Ancillary revenues rose just 7 per cent to €39.6 million, reflecting the impact of lost duty free sales while staff costs jumped 22 per cent to €48.5 million with staff numbers up 15 per cent to 1,262.

Mr Cawley said that 35 per cent of Ryanair's seat sales are now coming from its website with a further 40 per cent from its own call centre. The balance comes from travel agents and this is likely to remain around 25 per cent. Commissions paid to travel agents are now 5 per cent - "we're now at the right cost," said Mr Cawley.