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Updated 10.30
CUSTOMERS COULD REAP the benefits of an airline price war as Ryanair’s competitors try to compete with its low-cost model.
The Irish budget carrier today beat expectations for another year with a huge leap in profits.
The airline forecast it would increase passenger numbers another 10% over the coming 12 months, a capacity boost that would take it to about 100 million passengers for the 2015-16 period.
Ryanair this morning reported its after-tax profits were €867 million for the year to the end of March – up two-thirds on the tally for the previous 12 months.
In its results statement, the airline said this about the year ahead:
While our traffic growth this year will be strong, it would be foolish not to expect some irrational pricing response from competitors who cannot compete with our lowest costs and fares.”
But Ryanair added it would remain “vigorously” active in increasing load factors – that is, the share of seats it managed to fill on all its planes – while remaining “price passive”.
In a nutshell, that means the airline plans to boost profits by lifting passenger numbers, rather than trying for higher returns through hiking fares.
CEO Michael O’Leary said it expected to see the biggest competition in prices from rivals which hadn’t bought their fuel in advance and were enjoying the immediate benefits of low fuel prices.
“In the first half of the year we expect average fares to be flat to down 2%, but in the second half of the year we expect to see some irrational price competition,” he said.
We believe this will lead to some price competition next winter, particularly as Ryanair continues its successful expansion across Europe … we are guiding that average fares will fall by between 4% to 8%.”
O’Leary said more than half the airline’s growth this year would come from primary airports in cities where it had set up bases like Rome, Brussels and Berlin.
Low costs
The latest results showed that over the past 12 months Ryanair managed to carve out the big profit increase despite its revenues increasing only 12% in the same period.
The airline is now either the first- or second-busiest airline in most European countries, with the notable exceptions of the major German and French markets.
It said the biggest factor in driving its costs down was the lower price of fuel, while other expenses were flat – compared to many competitors which it said had experienced cost increases.
Early this year the oil price hit a six-year low of close to $50 a barrel, although it has since bounced back over 30%.
But Ryanair has also been the target of complaints for its cost-cutting practices with the mayor of Copenhagen recently banning 45,000 staff from flying with the airline over claims it underpaid staff. The airline has dismissed the suggestions as “inaccurate”.
“We very much welcome the amount of free publicity the mayor has generated for Ryanair’s services and we’re thrilled with the surge in bookings to and from Copenhagen in recent days,” O’Leary said in a presentation today.
The airline was also named just outside the ten least-favourite companies in a recent survey of Irish consumers, although its score has improved significantly during the past two years.
First published 9.57am
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The situation in NI is way worse than we have down here, even the figures in hospitels and ICY are simuler eventhough we have 2.61 more in population.
There have been
32,286 confirmed cases, – that equivalent in the ROI- 84266
6,893 in the last seven days. – that equivalent in the ROI would be 17,991
They are complaining about it, if we had them figures down here we would be all locked in our houses.
@Declan Sweeney: ok yea
@Declan Sweeney: Just to comment, I don’t necessarily think ‘cases’ is a good measure of how well a country is performing. For example, we have exponentially increased our testing rates, which has subsequently led to an increased number in cases. That doesn’t necessarily mean that we are currently losing this covid battle, if anything, its a major improvement.
Better measures of how well a country is responding would be mortality and hospital/ICU numbers
@Bobby: But yet retail is still open! Unbelievable!
@Bobby:
Yess and with NI they have 2 figures for deaths,
DOH says they have had 639 deaths from the viris but that only counts for those who die in hospitels mostly
\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\the stats office who deals with in hospitels, home, nursing homes and other places put the amount of deats up to Oct. 9th at 902 cases, so when they release the figures again that would be more than likely alot higher.
Numbers in hospitels and in ICU are both very high taking into consideration that we have 2.61 times the population
Sinn Fein complaining about possibly fines in the South, unwilling to tell people to stay in the North during these unprecedented times
@Michael Keegan:
According to themselves they are 2 different parties, SF in NI and SF in the ROI
God that’s awful and it only accounts for 6 counties yet they’re higher than the Republic. I don’t understand it, unless they’re popping back and forth from England
@Anna Carr: if you think people in NI constantly travelling back and forth to England is the issue then yes, you are correct. You do not understand it.
@Dermy: You obviously don’t know about the secret tunnel we have? Oh oh. This message will self distruct in 3……2…..
This debate should of happened in February.
The reason it didn’t was because of vested interests.
have your say