Low-cost airline Ryanair revealed a low-level profit boost yesterday and warned the recession which continues to afflict much of Europe will dampen growth again this year.
The Dublin firm, which operates on more than 1,600 routes, carried 79.3 million passengers in the year to March 31 an increase of 5% on a year earlier as revenues improved 13% to €4.8 million.
Pre-tax profits rose 3% to €650.9m, from €633m last year, with the airline fearing that continuing pressure on fares will lead to a reduced rate of growth in the months ahead.
Ryanair expects traffic to climb by another two million passengers to 81.5 million in the current year, helped by this summer’s addition of more than 200 routes and seven new bases, including Eindhoven, Krakow and Marrakech.
And it said it costs would likely continue to rise, with higher oil prices a particular strain.
Ryanair’s fuel bill increased by €290m during the last financial year, and now represents 45% of all the airline’s costs.
Average fares increased by 6% in the year to March, although this was outpaced by a 20% jump in revenues from additional services such as reserved seating.
The “added extras” combined to boost total income by €1 billion, representing 22% of all sales in the year.
The firm recently announced plans for the delivery of 175 new Boeing aircraft as it seeks to boost annual passenger numbers to more than 100 million by the end of 2018.
Outspoken chief executive Michael O’Leary said Ryanair was “uniquely positioned” to deliver traffic to European airports which offered low cost, efficient facilities.
“I am confident that in time this new order will enable Ryanair to extend its traffic leadership over Europe’s airlines, and generate further returns for our shareholders,” he said.
The latest annual results record from Ryanair beat market expectations and triggered a 7% rise in its share price.
Budget rival easyJet was also 4% higher at the close.
But the company, which remains the subject of a UK Competition Commission inquiry into its minority stake in Irish flag carrier Aer Lingus, continued to rail against the British authorities and European competition officials which ruled against a full takeover offer in February.
Analysts were encouraged by the company’s forecast that it will make post-tax profits of between €570m and €600m in the current year.
Gert Zonneveld, of Panmure Gordon, said Ryanair would outperformed the headwinds buffeting its flight path.
“Despite the tough market conditions we expect average fares to rise in the coming years, driven by a relative modest capacity growth and higher competitor fares, which should translate into attractive and sustainable profit growth,” he said.