Ryanair’s profits slipped by 8% to €523 million in the year to March, the airline announced today while unveiling plans to attract more families and business travellers.
The profits slide came despite a 3% rise in passengers carried to 81.7 million
Revenue per passenger was flat, as strong ancillary revenue growth offset a 4% fall in average fares. Excluding fuel, sector length adjusted unit costs fell by 3%.
Chief executive Michael O’Leary said: “While disappointing that profits fell 8% to €523 million due mainly to a 4% decline in fares, weaker sterling, and higher fuel costs, we reacted quickly to this weaker environment last September by lowering fares and improving our customer experience which caused second-half traffic to grow 4% as load factors rose 1%.
“Ancillary revenues grew 17%, much faster than traffic growth, and now account for 25% of total revenues.”
The Irish carrier is extending its more passenger-friendly approach in June by enabling children to receive discounts on allocated seats and bags when travelling with their families .
Families who travel frequently with Ryanair will be able to qualify for discounts on future flights.
This will be followed in the autumn by a new business service to include same-day flight changes, bigger bag allowances, premium seat allocation, mobile boarding passes, and fast-track through security at many airports.
“This service, together with our new GDS distribution strategy, will make Ryanair much more accessible and easier to use for business customers,” O’Leary said.
Distribution on Travelport’s Galileo and Worldspan systems started last month.
“We are in talks with other GDSs and hope to add more before year end,” O’Leary revealed.
Forward bookings for this summer are “significantly ahead” of last year, prompted by lower fares and the early release of seasonal schedules.
O’Leary said this should continue to deliver 2% higher load factors, “and help us manage fares closer to departure as we have less capacity to sell”.
Traffic is expected to grow in this financial year by 4% to more than 84.6 million passengers with fares rising by 2%
After tax profits are forecast to rise to between €580 million to €620 million.
Sourced from Travel Weekly