Ryanair flies high as profits rise 18%

RYANAIR shrugged off a doubling in fuel prices to report record interim profits yesterday.

The airline said profits after tax in the six months to end September were 18% higher at €237 million, despite its fuel bill increasing by 108% over the period.

A combination of higher fares, more passengers and cut in other costs lifted profits, chief financial officer Howard Millar said.

Revenues were 33% higher at just over €946m. Ancillary revenues, which it earns from onboard sales, car hire and insurance, contributed almost €130m to the total, growing by a faster pace than ticket sales.

Mr Millar said the airline expects ancillary revenues to become a greater part of the total with the launch of new products, such as onboard gambling.

The number of people carried by the airline increased by 29% to 18 million and most of the new routes launching over the six months performed well, it said. The load factor which measures how many seats per flight are filled declined by 1% to 86%.

The average fares paid by passengers was up 3%, though Ryanair was forced to cut prices on its routes from Shannon and Cork airports to see off competition from Easyjet.

"Load factors and market share are going well, but we are in a bit of a fares dogfight and they are a bit lower than we would like," Mr Millar said.

Mr Millar told the Irish Examiner that the airline was on course to make €295m in profits in the current financial year, which ends next March.

Fares in the current quarter were flat year-on-year, and they could fall by up to 10% between January and March.

"We generally do less well in the winter as we carry less passengers. But overall we are very happy with our performance," he said, adding that Ryanair expects to carry 35 million people in the year to end March 2006.

Having hedged its fuel bill for the winter, which should keep costs under control, the airline is monitoring whether to continue hedging for the summer.

Shares in Ryanair, which have gained 30% this year, slipped by 3% yesterday to close at €6.78.

Keith Bowman, analyst at Hargreaves Lansdown Stockbrokers, said: "When oil prices do eventually return to more normal historical levels, Ryanair should prove to be in better shape than ever."

Speaking at a press conference in London, Ryanair's chief executive Michael O'Leary, who has been at the controls of the carrier for almost a decade, said: "I have no plans to move on at the moment, but I suspect sometime in the next four to five years it will be time for me to go."