Ryanair has announced that its half-year profits slumped by 47 percent to 215 million (£172 million) as a result of soaring fuel costs. The airline's fuel bill in the six months more than doubled from 392.7 million to €788.5 million, with fuel accounting for more than half of total operating costs.
Passenger traffic grew by 19 percent to 32 million in the six months to September, as average fares (including bag charges) fell by 4 percent to 47. Total revenues grew by 16 percent to 1.8 billion. Unit costs excluding fuel fell by 6 percent, (including fuel they rose 21 percent), despite a 2 percent increase in average sector length.
Ancillary revenues in the half year grew by 28 percent to 322 million to account for almost 18 percent of revenues against 16 percent last year.
Chief executive Michael O'Leary predicted that the budget airline would rebound as the recession continues to drive down oil prices and fares this winter. He said: 'We expect continuing bankruptcies and consolidations to create even more opportunities for Ryanair to grow.'
'If oil prices remain at approximately $80 per barrel next year then our earnings will rebound strongly. We have a significant cost advantage over our competitors many of whom have hedged fuel next year at significantly higher levels than current market prices. This will force competitors to further increase air fares and widen the price gap between them and Ryanair's lowest fares.'
'With one of the strongest balance sheets in the airline industry, 2.1 billion in cash and the lowest cost base, Ryanair is strongly positioned to take advantage of the opportunities that will inevitably arise from the financial crisis and economic recession over the coming year.'
'Although we have limited visibility, we now believe that average fares in the second half will fall by between 15 percent to 20 percent leading to losses in the third and fourth quarters. Our full year average fare could fall by almost 12 percent although these lower fares will be largely offset by lower fuel costs. As a result our previous guidance remains unchanged and we remain confident that we will break even for the full year.' |
