Ash Cloud Cuts Ryanair Profits

Ryanair has reported the recent ash cloud from the Icelandic volcano caused a 24% fall in its profits during the first three months of its financial.

The disruptions caused by the volcanic ash cloud meant its net profit for the period from March to the end of June was €93.7m, with a cost of €50m for almost 10,000 flights cancelled in April and May.

However, the budget airline claimed in today's published results that excluding the damage from Eyjafjallajokull, net profit rose by 1% to €138.5m.

The company's CEO, Michael O'Leary, said their quarter one profits were adversely impacted by the closures of European airspace for 18 days in April and May. He said that despite the disruptions Ryanair continued to increase traffic, yields, and profits while ancillary revenues also rose to 23% of total revenues.

Speaking this morning, Mr O'Leary said: "Our outlook for the year remains cautious and unchanged. We expect passenger volumes will rise by 11% to 73.5m. We anticipate that yields in quarter two will rise by between 10% to 15%, but since we have no visibility, we must remain cautious about yields for the coming winter."

Mr O'Leary also reiterated his call for an end to the €10 flight tax, and described the closure of airspace during the ash cloud as "unnecessary".

He also called for for the introduction of a cap on the amount and period that passengers can claim for against the airlines in cases of delayed or cancelled flights due to disasters such as the ash cloud.

"Such a cap would prevent the discrimination which currently exists, whereby EU coaches and ferries already have their liability limited to the ticket price paid, whereas airlines are exposed to unlimited liability even when governments close their airspace and prevent airlines from flying," he said.

(DW/BMcC)