Ryanair sees record profits, hedges oil needs
Ryanair has announced record after-tax profits of €302m, some €7m ahead of previous expectations.
Traffic grew by 26% to 35m passengers while yields were up 1%, the airline said today.
Total revenues grew by 28% to €1.69bn.
Excluding fuel, unit costs fell by 6%. Including fuel, they rose by 5%.
Ryanair referred to the rising cost of fuel by saying fuel costs rose by 74% in the year to €462m.
However, Ryanair achieved an 18% after0tax margin, as adjusted net profits increased for the year by 12% to €302m.
Ryanair boss Michael O’Leary said: "Ryanair has again delivered record traffic and profits despite substantially higher oil prices, intense competition and the absence of Easter from the fourth quarter.
"This robust performance validates our lowest fare/lowest cost model which continues to grow profitably in Europe even during adverse market conditions, when many of our competitors are reporting losses.
"The key to Ryanair’s traffic and profit growth was our refusal to levy fuel surcharges on our passengers at a time when most other airlines in Europe are introducing or increasing them.
"In some cases other airline surcharges exceed our average fares. This is driving millions of passengers to Ryanair. We will continue to absorb significantly higher oil prices thanks to the benign yield environment and continuing unit cost reductions."
Ryanair has hedged 90% of the airline's oil needs from June to October 2006 at an average price of $70 a barrel, but remains unhedged from October onwards.
"As always hedging will eliminate near-term uncertainty and risk, it will not deliver lower costs during periods of rising oil prices," said Mr O'Leary.
