Ryanair shares surge on back-of 17% rise in interim profit

Low fares airline Ryanair's share price closed at €8.75 (£6.89)in Dublin yesterday, up one euro, having risen sharply on the back of its half-yearly results which showed a 17 per cent increase in pre-tax profits, to £42.9 million. By the close in Dublin, the shares were up $3 1/4 on the NASDAQ to $46 1/4 (€41.11).

The company also said abolishing duty free had had no material effect on its results. Analysts attributed recent weaknesses in its share price to fears that the abolition of duty free - at the end of June last - would affect its performance.

Meanwhile, Ryanair refused to concede yesterday that its chances of striking a deal for a special low cost terminal at Dublin Airport now appear to be dwindling, following Public Enterprise Minister Ms O'Rourke's declaration that she was not in favour of the proposal. Ryanair's financial controller, Mr Howard Millar, said the proposal had the support of the Tanaiste, Ms Harney, and a growing number of interest groups such as the Irish Hotels' Federation.

"We remain confident that the Government will let us build another terminal at Dublin Airport," he said, "once they see the pain no growth in passenger numbers in Dublin can bring to tourism."

Mr Millar said the airline's growth out of Dublin had been constrained as part of a Ryanair plan to show Aer Rianta - the State airports operator - that unless it got a better deal on airport charges it would not add any more flights. He said this would affect the airport's growth and ultimately any flotation plans Aer Rianta may have.

The results for the six months to September 30th last show the airline's total revenues were up 17 per cent to £153.2 million. After tax profits rose by 23 per cent to £33.4 million.

The airline carried 2.89 million passengers compared to 2.58 million passengers for the same period last year, a rise of 12 per cent. The company said it was on target to carry six million passengers in the full year.

Ryanair said only 22 per cent of its total traffic now originated from Ireland. The airline's chief executive, Mr Michael O'Leary, said the cost base had already been agreed for up to six new routes from Britain to Europe "and we will continue to grow profitably and with the benefit of a lower cost base, away from Ireland, as we have in the last two years".

Aer Lingus announced last week that it was switching focus and would now concentrate on business and high end leisure passengers. It is also pulling out of Stansted Airport and switching to London City Airport.

Ryanair said yesterday that it would add four additional flights per day to Stansted on its current schedule from January. Mr Millar said the aim was to "block off" anyone else getting into Stansted. He said Ryanair would now have 11 flight departures from Stansted every morning between 7 and 7.15 a.m.

Mr Millar said he was "comfortable" with analysts forecasts and that current grading remains moderately ahead of "demanding targets". This is due to higher than expected yields and the strength of sterling. One forecast for full year pre-tax profits is €82.5 million (£64.9 million). Mr O'Leary said that the company expected to drive down yields through the winter to maintain traffic growth and "prevent our flag carrier competitors from raising fares to the detriment of consumers".

Meanwhile, another row broke out last night in the ongoing battle between Ryanair and Aer Rianta over airport charges. Aer Rianta produced copies of tickets to Manchester and Stansted, showing a breakdown of airport charges as well as one with Dublin airport charges. It showed that the charge for Manchester is £6.19, at Stansted it is £6.13 and £5 in Dublin.

An Aer Rianta spokesman said the Ryanair was "consistently and falsely" complaining about how Dublin was the most expensive airport, but the airline's tickets showed the opposite. He added that the actual charge in Dublin was around £4 per passenger. "They can't have it both ways," he said.

Mr Millar agreed that the current cost to Ryanair in Dublin was about £4, but said the notional charge involved is £7.24, "but nobody pays this charge" [because of discounts which are being unwound]. He said the £6.13 and £6.19 charges were a £5 sterling airports charge converted to pounds.

He argued that Ryanair could not reveal the real cost of the charges at Stansted, "under pain of death". He said the charges had been stripped out on the ticket so that when Aer Rianta increases its airport charges from January, "people will see that they've gone from £4 to £8 (per passenger)".