Ryanair confident of European goal

[PW14]

Fra gaarsdagens Times:

RYANAIR said that it was set to become Europe’s biggest airline in the next seven years, after predicting yesterday that it would be flying more passengers than British Airways by the late summer.
The Irish airline, which celebrates its 20th anniversary this year, has beaten its own downbeat forecasts to record a 29 per cent increase in pre-tax profits and 19 per cent passenger growth.

The airline, which had wrongly predicted a blood bath among Europe’s low-cost airlines, carried more than 27.6 million passengers in the past financial year and expected to carry 35 million this year. Monthly passenger numbers at the no-frills airline were expected to overtake those of British Airways later this summer.

Ryanair, which is aiming to overtake Lufthansa to become Europe’s biggest airline, said it was confident that it would have 70 million passengers by 2012. The airline posted record results, saying that fuel surcharges imposed by its rivals had pushed more passengers its way.

It said that yields were 2 per cent higher than last year, partially offsetting the 14 per cent yield decline in 2003-04 on which it had based its gloomy forecasts.

Michael O’Leary, chief executive, said: “Contrary to initial expectations, average yields for the 12 months rose by 2 per cent, despite a 16 per cent increase in capacity.”

Pre-tax profits for the year to March 31 jumped 29 per cent to €295.9 million (£200.4 million), despite Ryanair’s fuel costs rising by 52 per cent.

Mr O’Leary said: “Our outlook for the coming 12 months is more positive than it was this time last year.”

Ryanair said that advance bookings for the summer months were strong.

Howard Millar, the deputy chief executive, said: “The market is not as competitive as it was 12 to 18 months ago. There’s not the same level of fare discounting.”

Earnings at the airline were further helped by a 39 per cent increase in revenues from the cross-selling of car hire, hotel rooms and travel insurance.

The airline said that it continued to budget for higher oil prices but expected that these would be offset by slightly better revenues per passenger.

Ryanair, which has not been hedging fuel prices since October last year, has now hedged 75 per cent of next winter’s fuel needs at rates equivalent to $47 a barrel.

In February Ryanair ordered 70 Boeing 737-800 aircraft and took options to buy 70 more.

Mr O’Leary said yesterday: “Without question the single most important initiative of the past 12 months was the purchase of 140 additional Boeing 737-800s.”

Shares in Ryanair closed up 18 cents at €6.49.

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