Ryanair shares rose strongly on Dublin and London markets after the low-cost airline produced a bumper set of full-year results. Pre-tax profits rose more than 37 per cent to #123.4 million (£97.2 million) while turnover was up 32 per cent to almost #433 million.
The strong profit growth at Ryanair comes against a background of severe difficulties in the European airline sector, where losses and falls in profits have become almost standard. Major flag-carrying airlines like British Airways, Lufthansa, Iberia and Air France - not to mention Aer Lingus - are suffering severely. The low-cost sector where Ryanair is dominant is the only part of the industry showing any growth. "We are the only low-cost airline that is profitable throughout the whole year," commercial director Mr Michael Cawley said.
"Trading conditions over the past 12 months have been difficult, characterised by significantly higher oil prices, fears of an economic downturn, significant retrenchment in the technology sector and the outbreak of foot-and-mouth disease in the UK in the last quarter.
"As a result, most of our European competitors have issued profit warnings or reported losses. What makes Ryanair different from other low-fare airlines is that, although our average fares are some 30 per cent lower, our profits rise as our traffic grows," said chief executive Mr Michael O'Leary.
Passenger numbers at Ryanair increased 35 per cent to 7.4 million last year and the airline is targeting a further 24 per cent growth in the current year to 9.2 million passengers. The airline's load factor increased by 5 per cent and margins improved from 20 per cent to 22 per cent.
While costs overall increased by 31 per cent to #373.4 million, these were partially offset by a 33 per cent fall in sales and marketing costs as a result of the increased level of bookings over the Internet. About 72 per cent of bookings are coming through the Ryanair.com website and only 8 per cent are coming via travel agents.
Mr Cawley saw limited scope to increase Internet bookings substantially and said 80 per cent was about as much as Ryanair could expect in Web bookings. He said it would always have its call centre in Dublin, where 200 people are currently employed.
In the current year, the airline expects to increase the number of routes it serves from Stansted and its new hub in Charleroi, Belgium. On the shareholder front, Ryanair is also taking action to increase the proportion of its shares held by EU investors. This currently stands at more than the 51 per cent demanded by the EU.
In future, shareholders will no longer be able to swap their ordinary Dublin and London-listed shares for the Nasdaq-listed American Depositary Shares.
