Ryanair has reported a jump in pre-tax profits of more than £3 million to £8.1 million for the three months to December 31st last, compared to the same quarter in 1996. Pre-tax profits were almost £32 million for the nine-month period to December 31st. The strong results led to a rise in the share price of 10p on the Dublin stock exchange to £4.05p.
Meanwhile, the company will launch at least four new routes within the next three weeks, operating from London to elsewhere in Europe. And it has mooted the possibility of going to the market for more funds to back expansion in the future, saying it will acquire up to 25 more aircraft over the next five years.
Ryanair's chief executive, Mr Michael O'Leary, said last night that the company would also undercut any low fares which British Airway's new low-cost subsidiary, Blueskies, launched. The two airlines are expected to clash on at least one or two routes from London to Europe.
Ryanair reported a rise in net profits to £6.1 million from £3.3 million. The company said the number of passengers grew by 30 per cent to just under one million for the quarter, due to the success of its new European routes (Paris and Brussels).
The company continues to claim that trading for January has been unaffected by the dispute with baggage handlers. It said passenger numbers were up by 35 per cent while bookings increased by 42 per cent, compared to the same period last year.
Mr O'Leary said last night that the figures for the third quarter included a dispute with the travel agents. Last year, Ryanair cut the commission it pays to travel agents from 9 per cent to 7.5 per cent. Some agents then declined to handle Ryanair bookings.
Mr O'Leary said that this dispute had no affect on the airline's figures and to the best of his knowledge, virtually all agents were now handling bookings. The dispute had "died out almost completely" when British Airways followed suit in Britain, reducing commissions by the same amount.
Mr O`Leary said the reduction in commission had generated significant savings for the airline. Around 60 per cent of Ryanair bookings are made through travel agents, while 40 per cent - including all bookings for flights out of London - are made through Ryanair Direct, its call centre operation. He said Ryanair, which currently employs 200 people in Ryanair Direct would recruit a further 100 people this year.
He admitted that the airline was concerned about the advent of British Airways' low-cost operation, but he was confident that Ryanair could compete.
He said that Ryanair would carry five million passengers this year and would announce details of six new routes shortly. These would be based out of London to other European destinations. Ryanair may launch one more route from Dublin to Britain. However, he said there was very limited opportunity for Ryanair to offer more routes out of Ireland and he envisaged further expansion in Europe. "We may eventually look at the `triangle' - offering services from Dublin to London and London to Europe and Europe back to Dublin," he said. Mr O'Leary said the airline would be adding four or five aircraft per year to its fleet - it currently has 20 aircraft - over the next five years as it expanded its routes.
The quarterly results show that there has been a sharp rise in total operating costs - up by 35 per cent to £37.8 million. The company said this reflected the increase in the level of activity and the costs associated with the expansion of the fleet.
