Ryanair expansion set to send profits sky high

LEADING low-fare carrier Ryanair is perfectly poised to increase its profits even further as demand for its services continues to grow, the airline’s chief executive Michael O’Leary said yesterday.

Ryanair is adding planes, expanding its network of routes and base airports and expects to carry 40 million passengers a year, with a fleet of about 110 aircraft, by 2008.

It expects to handle more than 20 million people in 2004, compared with 15.7 million in the current period.

Following the addition of new routes out of London yesterday and the launch of its first Scandinavian base at Skavsta airport near Stockholm, Ryanair will now have a network of 100 routes across 15 European countries.

Mr O’Leary said Ryanair’s soaring passenger growth would not slow, because more European airports wanted it to set up bases, requiring it to order more Boeing aircraft.

Europe’s second-largest low-fare carrier has already placed orders for 100 Boeing 737 narrow-body jets and a further 50 options at a time when civil aircraft manufacturers are reeling from excess capacity, economic uncertainty and fears of war in Iraq. The airline has since converted three of the options to firm orders.

“We are talking to Boeing about speeding up orders and in fact taking in more aircraft,” Mr O’Leary said after he announced five new routes from London Stansted airport to Germany, France, Netherlands and Norway.

Ryanair said it will increase frequency on 11 of its existing services from London Stansted to Bologna, Kerry, Hamburg, Turin, Venice, Stockholm, Milan, Rome, Frankfurt, Barcelona and Strasbourg.

Mr O’Leary declined to reveal details of the negotiations with Boeing.

“If we are aggressive now, we are going to make a bloody fortune,” said Mr O’Leary, adding that because of the slump in demand for new aircraft “it was time to buy aircraft”.

Mr O’Leary also said January traffic figures to be released next week would show year-on-year passenger growth at about the same rate as December growth of 64% year-on-year.

“We are now in discussions for the next base with seven, maybe eight, airports around Europe,” said Mr O’Leary yesterday, adding that the airline envisaged up to three more bases in Germany, and another base in Italy The next two “obvious” locations for a base are France and Spain, Mr O’Leary said.

“It’s whoever comes up with the best package of facilities and costs,” he added. By the end of April this year Ryanair will have 21 130-seat 737-200s, which it is gradually replacing, and 36 189-seat 737-800s, Mr O’Leary said.