Newspaper article International Herald Tribune

Earnings at Ryanair Ignore Crisis in Europe ; While Rivals Retrench, Profit at Low-Cost Carrier Rises 13% on Expansion

Newspaper article International Herald Tribune

Earnings at Ryanair Ignore Crisis in Europe ; While Rivals Retrench, Profit at Low-Cost Carrier Rises 13% on Expansion

Article excerpt

While recession and high fuel prices have led Ryanair's higher- cost rivals to retrench, the Dublin-based carrier has thrived.

CORRECTION APPENDED

The budget airline Ryanair reported a 13 percent increase in annual profit on Monday as Europe's protracted economic downturn continued to drive air passengers to search for the lowest possible fares.

Net profit rose to EUR 569 million, or $731 million, in the year ending March 31, surpassing a profit last year of EUR 503 million, Ryanair said. Revenue also climbed by 13 percent, to EUR 4.9 billion, as traffic increased by 5 percent to just over 79 million passengers.

While recession and austerity, combined with high fuel prices, have led Ryanair's higher-cost rivals to retrench and cut capacity across their networks, the Dublin-based carrier has thrived, adding new routes and service in countries like Greece, Morocco and Croatia.

The airline -- already Europe's largest by passenger numbers, with a fleet of more than 300 aircraft -- recently announced plans to order 175 new Boeing 737 jets worth more than $15 billion at list prices. It expects those jets to help fuel an expansion to more than 100 million passengers before the end of the decade.

In a statement, Michael O'Leary, the chief executive, said the strong results were "testimony to the strength of Ryanair's ultra- low-cost model," and he predicted the carrier would be able to achieve a 20 percent share of the intra-European air travel market over the next five years. Ryanair's current share of the European market is around 12 percent.

"Our new-route teams continue to handle more growth opportunities than our current fleet expansion allows," Mr. O'Leary said, adding that Ryanair was considering adding new connections to airports in Germany, Scandinavia and Central Europe to take advantage of cutbacks at rivals like Air Berlin, SAS and LOT, the Polish flag carrier.

Analysts said the main brake on Ryanair's growth in the short term to medium term would be the rate at which it can bring its newly ordered jets into service. …

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