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Posts Tagged ‘ low cost ’

Ryanair Predicts Further Profits

Ryanair has positively reassessed its profit predictions for 2012 following an unexpected revenue surge of 13% in the final quarter of last year.

The Dublin-based budget airline achieved a net profit of €15 million in the three months up to 31 December 2011, well ahead of the €16 million loss forecast by leading analysts in a poll compiled by the company. Overall revenue during this period came in at €844 million, €25 million more than expected. In light of this, the firm now expects profits for the year to 31 March to reach €480 million.

The increased profit comes amidst a 2% fall in passenger numbers and an 18% rise in fuel costs. The airline maintains it more than compensated for such expenses by raising ticket prices by an average of 17% and grounding 80 of its 270 planes. Improved winter weather conditions also aided air travel after severe snow storms threw the sector into chaos in late 2010 and saw Ryanair lose €10 million.

“The EU recession, higher oil prices, the unfolding failure of the package tour operator model, significant competitor fare increases and capacity cuts, has created enormous growth opportunities for Ryanair,” chief executive Michael O’Leary said. However, the outspoken CEO admitted the estimated €350 million increase in the airline’s fuel bill next year “poses a significant cost challenge.”

While Ryanair and other low-cost airlines such as EasyJet have posted healthy figures, higher-priced competitors continue to struggle in the current economic climate. German group Lufthansa and Air France-KLM have cut profit forecasts and slashed plans to expand in 2012.

According to the International Air Transport Association, Ryanair carried more international scheduled passengers than any other airline in 2010. Its passenger numbers are expected to grow to 80 million this year, up from 76 million in 2010.

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