Ryanair has announced a 19 percent increase in passenger numbers over the last six months, but profits have nearly halved over the same period
The figures show a 47 percent fall in profits in the half year to September 30, caused largely by the carrier’s fuel bills rising to €788.5m, more than double the €392.7m figure for the same period in 2007.
However Ryanair's CEO, Michael O'Leary, called the increase in passenger numbers, “a testimony to the strength of the Ryanair lowest fare model”. Total revenues also increased by 16 percent to £1.4bn.
O’Leary believes the budget airline’s low fares and no fuel surcharge policies are responsible for its recent success with passengers.
Pointing out the most recent casualties of the recession - Alitalia, Sterling and Zoom - O’Leary predicted that many more European airlines would suffer the consequences of the global crisis and may not survive the winter, while the "high charging mega carriers” such as Air France, BA, and Lufthansa, would continue on.
“As more airlines go bust, and the wave of European consolidation continues, the strongest survivors will be those airlines - like Ryanair - who are well financed, have a strong balance sheet, and the lowest cost base.”
The CEO said Ryanair will continue to respond to the crisis with lower fares and price promotions, with passenger numbers expected to increase further over winter as a result.
O’Leary said: "We expect continuing bankruptcies and consolidations to create even more opportunities for Ryanair to grow.”
Among these opportunities is the launch of a new Edinburgh base this week, which will introduce eleven new routes including Berlin, Stockholm and Krakow. By March 2009 Ryanair says it will own a fleet of 195 Boeing 737-800 and will have opened three new Italian bases.
O’Leary has also hinted that the demise of airlines during the current tough economic climate might allow him to pick up cheap aircraft for a proposed low-cost transatlantic service, which would run separately from Ryanair. There has been much media speculation about such a venture over the last week or so, although any firm plans still appear to be some way off.
For more information visit ryanair.co.uk.
Report by Liat Clark
