RYANAIR is currently involved in negotiations with banks to fund the acquisition of aircraft for the airline's planned expansion into Europe, according to its chief executive, Mr Michael O'Leary.
Ryanair has also announced that American financier Mr David Bonderman, who headed a consortium that acquired a 20 per cent stake in the airline in a deal that valued Ryanair at £56 million, is to become chairman. The current chairman, Dr Tony Ryan, whose family interests own the 80 per cent balance, has decided to step down.
Speaking to The Irish Times after the group reported after tax profits of £4.97 million for the 15 months to the end of March 1995, Mr O'Leary said that Ryanair is continuing with its preparations for flights to as yet unspecified European cities from London's Stansted Airport. Mr O'Leary declined to identify the likely routes, adding: "We don't want to forewarn our opposition."
He added that Ryanair has also submitted proposals to the Department for Tourism and Transport to operate European routes from Dublin, but that these would be dependent on lower landing charges from Aer Rianta.
Aer Rianta has fiercely contested Ryanair's claims that its Dublin landing charges are out of line, but the Ryanair chief executive made it plain yesterday that there is little prospect of expanding its Irish based operations until landing charges are reduced.
In the 15 months to the end of March 1995 (Ryanair changed its year end to take account of seasonal factors) the airline had after tax profits of £4 million on turnover of £99.4 million. Even after annualising these figures it is clear that Ryanair had strong growth in that period, as after tax profit in calendar year 1993 was £1.9 million on sales of £57 million. Passenger numbers in the 15 months to March 1995; were 2.1 million compared to 1.1 million in 1993.
Mr O'Leary declined to comment on the results in the year to March 1996, which will be published in the new year. But Ryanair has previously indicated that it aims to generate 25 per cent year on year growth each year. This suggests that turnover, profits and passenger numbers will be well up on the 1995 figures.
In his statement yesterday, Dr Ryan said that Ryanair is currently operating with an average load factor of 75 per cent on its 11 aircraft serving 14 destinations. He said that passenger numbers in the current year are likely to be over three million and added: "We need to grow our capacity."
The investment by Mr Bonderman and his co investors in the Irish Air limited partnership has left Ryanair; with very little debt, said Mr O'Leary. He added that the new Boeing 737 being negotiated will be funded through debt and cash flow. He added that the arrival of Mr Bonderman as director, and now chairman of the airline, has been of great assistance in, Ryanair's discussions with banks on debt finance.
Mr O'Leary repeated that following the Irish Air investment for a 20 per" cent stake, "There is no further requirement for equity finance in the near term." Dr Tony Ryan has said, however, that at some stage in the future, Ryanair might look at a stock market flotation to support its expansion.
