Mr Cawley admitted that if British Airways creates its own low-cost, no-frlls airline it could affect Ryanair revenue. However, he claimed BA would never undercut Ryanair. If it did, Ryanair would further undercut the British carrier.
Analysts said last night that there had been a lot of talk about BA's intentions in low-cost fares.
Introduction of new routes and tight cost controls assist revenue growth
Ryanair's turnover has risen sharply to £96.9 million for the six months to the end of September, a 36 per cent increase over the same period last year, mainly due to the introduction of new routes during the period. Profits after tax, when certain non-recurring items are taken out, have increased from £12.4 million to £18.6 million. There was little reaction in the markets to the figures, with Ryanair shares drifting 4p lower to 316p in Dublin in thin volume. In New York, Ryanair ADR's were unchanged on $24.
The company, whose flotation in Dublin and New York last May was 18 times oversubscribed, claimed it would surpass Aer Lingus on passenger numbers carried early next year if its financial performance continued on track.
Ryanair said it would introduce four new routes next year. One route may be out of Dublin and the remainder from London. It is probable that the destinations will be Scandinavian countries.
Ryanair's chief financial officer, Mr Michael Cawley said the company was still negotiating with Boeing and Airbus on the purchase of 20 new aircraft for delivery in 1999. He said Ryanair would be well-placed to part-fund the purchases.
The company has shareholder funds of £77 million. Mr Cawley said a share issue, debt financing and leasing were all possibilities. "We won't need all the aircraft at once," he pointed out, `and will have plenty of cash to put towards funding them."
The company said it was continuing to benefit from one of the strongest balance sheets in the airline industry, with substantial cash reserves and no debt.
The figures show that passenger numbers grew by 28 per cent and the company carried just over two million passengers in the six months under review. The figures show that total operating costs rose 29 per cent to £74.33 million. The company attributed this to the increase in activity and "continuing tight control over costs".
Fuel costs rose by 60 per cent to £10.59 million. The company attributed this to a 25 per cent increase in fuel costs in local currency, an increase in the number of destinations flown and an increase in the average distance to destinations. Maintenance costs also rose sharply as the company increased its fleet by four, to 15 aircraft from 11 previously.
Ryanair chief executive, Mr Michael O'Leary said the company had registered immediate profitability on new routes with load factors in excess of 75 per cent on each route within four months.
Mr Cawley said Ryanair was growing all elements of the business by 25 per cent a year. He said the company would be happy to maintain this level of growth as this was manageable, but if growth was 50 per cent, it could cause problems. "Our shareholders are happy with that kind of growth," he said.
Mr Cawley said Ryanair was currently talking to around 60 airports in Europe about new routes.
Marketing and distribution cost increased by 28 per cent as five new routes were introduced. Mr Cawley said only 23 out of 400 travel agents were not handling Ryanair business. The company reduced agents' commission earlier this year from 9 per cent to 7.5 per cent and some agents no longer sell Ryanair products.
He said the dispute had had no affect on the results. In fact, the company had saved money, he said, as more people booked tickets through Ryanair Direct. He said the company had taken some flak over this service as people had found it difficult to get through. Ryanair Direct was now answering 85 per cent of calls within one minute, he claimed.
He said the company was recruiting people to Ryanair Direct at the rate of 10 per week. Overall, Ryanair's workforce has increased from 663 to 874.
He said most of the new routes would be out of London, with one possibly from Dublin. "We hope to launch four or five new routes next spring," he said.
He said the destinations had to feature three elements - cheap airport charges, high incumbent fares and a reasonable population near the airport who were willing to travel. "We are already being asked to put on more services on our Stockholm and Oslo routes, which we launched recently," he said.
Mr Cawley admitted that if British Airways creates its own low-cost, no-frills airline it could affect Ryanair revenue. However, he claimed BA would never undercut Ryanair. If it did, Ryanair would further undercut the British carrier.
Analysts said last night that there had been a lot of talk about BA's intentions in low-cost fares.
