Ryanair Profits Go Up

However, there was also a warning that taking into account falling passenger yields and increasing costs, profitability may grow by only 5 per cent in the next year, and last two quarters of the year the Ryanair Company might have a small loss, because the passenger yield went even down.

"These monopoly price increases demonstrate again the abject failure of aviation regulators in both Ireland the UK to protect the interests of consumers," Ryanair representative said.

One of the Ryanair airline future plans is to buy back up to €300m of shares. They want to begin during this week.

Chief executive of Ryanair Michael O'Leary, mentioned that such high profits and the considerable growth in traffic, yields per passenger and revenues were the result of the strong business model of Ryanair Company, which aim was to provide the cheapest fare of any airline operating on routes it served.

The profit growth became possible partly, because of 7 per cent increase in average fares and fuel surcharges made by other companies. The next step made by Ryanair Company was to charge passengers additionally for checking in luggage, which should encourage passengers to travel only with hand luggage.

Scheduled fares rise brought to €1,87bn (€1,43bn) revenue. Additional revenues from other items such as onboard food sales also rose 40 per cent to €362m (€259m). The result was that the revenue grew 32 per cent to €2.24bn against €1.69bn the previous year on passenger numbers up only 22 per cent to 42.5m (34.8m).

However, one part of the revenue increase was lost due to a 9 percent increase in unit cost, which consisted of a 50 percent increase in fuel costs to €693m and staff costs increase, because of the increased lengths of flights Ryanair performs.

Concerning future plans Ryanair company representatives mentioned that they plan to increase passenger numbers by another 22 percent to more than 52m this year, but if the market situation changed the yields per passenger might fall by even 5 percent. Together with the projected 6-7 percent increase in unit cost, the profit growth will be only about 5 percent, and there is a possibility that the last two quarters will have some loss.

Ryanair was set up by the Ryan family with a share capital of just £1, and a staff of 25 in 1985. They launch their first route in July with daily flights on a 15-seater

Bandeirante aircraft, operating daily from Waterford in the southeast of Ireland to London Gatwick. Ryanair's first cabin crew recruits must be less than 5ft. 2ins. tall in order to be able to operate in the tiny cabin of the aircraft!

By the end of March 2007 Ryanair will operate a fleet of 134 new Boeing 737-800 aircraft with firm orders for a further 117 new aircraft (net of planned disposals), which will be delivered over the next 5 years. These additional aircraft will allow Ryanair to double in size to over 84m passengers' p.a. by 2012. Ryanair currently employs a team of 4,200 people, comprising over 25 different nationalities.- Alla Harutyunyan for HULIQ.COM