Ryanair half-year profits up 17%

Ryanair revealed a 12% hike in average fares and soaring ancillary revenues as it posted a double-digit rise in half-year profits today.

Ryanair revealed a 12% hike in average fares and soaring ancillary revenues as it posted a double-digit rise in half-year profits today.

The low-cost carrier reported a 17% increase in underlying net profits to €451.9m for the six months to September 30 and upped its guidance for its full-year performance.

Ryanair’s half-year figures were boosted by a 10% lift in passenger numbers and higher fares, but it said it also saw a 22% leap in ancillary revenues, such as baggage fees, priority boarding and onboard drinks.

Ryanair said forward booking revenues for the winter were better than expected, which it forecast would see net profits for the full year of between €380m and €400m.

It had originally indicated a figure of between €350m and €375m.

The half-year surge in fares and passenger numbers helped Ryanair offset a 44% increase in its fuel bill – although this was also partly due to Ryanair operating more and longer flights.

Average fares rose to €44, according to Ryanair, although chief executive Michael O’Leary added a note of caution.

He said: “Our outlook for the fiscal year remains cautious as we have little visibility on fourth-quarter yields.”

The carrier said its bill to cover the cost of the volcanic ash cloud disruption earlier this year was now likely to be less than first feared, at €32m against €50m.

Half-year adjusted profits exclude the hit for the ash crisis, which when taken into account leave net profits at €424m.

Mr O’Leary said the group’s half-year figures were “testimony to the robustness” of its low-cost model.

However, airlines across the board are seeing a marked recovery in air travel as the recovery takes hold.

British Airways last week returned to half-year profit for the first time in two years thanks to a bounce-back in business and premium traffic.

The Ryanair chief also reiterated his approval of the recent UK Court of Appeal decision which upheld the Competition Commission’s recommendation that the BAA airport monopoly be broken up.

"The break up of the UK’s failed BAA airport monopoly model lends weight to our campaign to break up the equally high cost, failed DAA airport monopoly in Ireland where sadly, as we predicted, tourism is collapsing." Mr O'Leary said.

He also again called on the Govt to scrap the €10 tourist tax and said Ryanair "warmly welcomed" last week’s ESRI report which recommended that the Government should consider selling off the two terminals at Dublin airport to competing operators.

He also criticised repeated industrial action by air traffic controllers in Belgium, France and Spain which he said had resulted in Ryanair being forced to cancel over 2,000 flights.

" These highly paid protected bureaucrats have now disrupted more passengers than the Icelandic volcano and still the EU sits idly by and does nothing," Mr O'Leary said.

"We have called on the EU Commission to reform ATC by removing the “right to strike” for such an essential service, as well as deregulating Europe’s ATC services to allow non striking ATC’s to keep EU skies open."

Later, Mr O’Leary said he expected Ryanair’s fares – and air fares generally - to increase “over the next couple of years”.

He added that charges for those who want to take checked-in bags on Ryanair flights would also go up.

Mr O’Leary said: “Charges will carry on going up until everyone gets the message that hold luggage is verboten.”

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