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26/07/2011
Fare Increases For Profitable Ryanair
The Irish 'budget airline' Ryanair has reported a jump in first quarter profits and passenger numbers.
However, it still aims to push up fares, which the firm said would rise by an average of up to 12% in the year to the end of March 2012 as fuel prices rise.
That's even though it has already bought 90% of its fuel for this year, and while at a price 18% above last year's, this is still below current prices.
The rise is in spite of pre-tax profits for the three months to the end of June came in at 156.6m euros ($225m; £138m), up 50% from the same period last year, with passenger numbers rising 18% to 18m.
Ryanair boss Michael O'Leary insisted it was necessary to increase fares as user numbers hit by the "unnecessary airspace closures" due to the ash cloud from a volcano in Iceland in the same period of 2010.
"Significantly higher revenues were largely offset by higher operating costs as fuel rose 49%," he added.
Also, Ryanair has already announced plans to cut its winter capacity as a result of higher fuel costs.
But, it maintained its forecast for profits after tax in the full year at €400m.
This is also happening with the rival budget airline Easyjet, which has raised its profit, forecast for the year, saying its new strategy, which includes appealing to more business customers, was seeing "good progress".
Its passenger numbers increased by 17.3%, close to Ryanair's 18% growth.
(BMcC/GK)
However, it still aims to push up fares, which the firm said would rise by an average of up to 12% in the year to the end of March 2012 as fuel prices rise.
That's even though it has already bought 90% of its fuel for this year, and while at a price 18% above last year's, this is still below current prices.
The rise is in spite of pre-tax profits for the three months to the end of June came in at 156.6m euros ($225m; £138m), up 50% from the same period last year, with passenger numbers rising 18% to 18m.
Ryanair boss Michael O'Leary insisted it was necessary to increase fares as user numbers hit by the "unnecessary airspace closures" due to the ash cloud from a volcano in Iceland in the same period of 2010.
"Significantly higher revenues were largely offset by higher operating costs as fuel rose 49%," he added.
Also, Ryanair has already announced plans to cut its winter capacity as a result of higher fuel costs.
But, it maintained its forecast for profits after tax in the full year at €400m.
This is also happening with the rival budget airline Easyjet, which has raised its profit, forecast for the year, saying its new strategy, which includes appealing to more business customers, was seeing "good progress".
Its passenger numbers increased by 17.3%, close to Ryanair's 18% growth.
(BMcC/GK)
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