Ryanair plunges into the red as fuel costs soar
LONDON – Ryanair has been hit with a third quarter loss of €102 million, compared to a profit of €35 million in the same period a year earlier.
Average fares fell by 9% to €34, while fuel costs rose by 71% to €328 million.
Revenues in the three months to the end of December rose by 6% to €604.5 million, as traffic grew 13% to 14 million passengers.
Ancillary revenues rose by 19% to €132 million, and now account for 22% of revenues – up from 19% a year earlier.
The budget carrier expects to make a profit at the year end due to falling fuel costs.
CEO Michael O’Leary said: “Our Q3 loss of €102 million was disappointing, but in line with expectations, and was almost entirely due to a €136 million increase in fuel costs.
“Average fares, due to recession and weaker sterling, fell by 9% to €34, but this decline was largely funded by a 3% reduction in non fuel operating costs.â€
He added: “The general economic environment remains extremely difficult, as the recession saps consumer confidence, but this is proving to be good for Ryanair’s traffic growth, as more and more passengers switch to Ryanair’s lowest fare lowest cost model.
“Many of our competitors have in recent months reported short-haul traffic falls, while Ryanair continues to grow. We will continue to lower fares to maintain our traffic growth and high load factors.â€
O’Leary revealed that it is to start a six month trail of the use of on board mobile phones at the end of the month on 20 Dublin-based aircraft. This should be extended to some 40 aircraft by the end of the summer.
“We expect initial revenues to be small, but believe that in-flight communication will be a strong source of ancillary revenue growth in future years,†he added.
by Phil Davies
Ian Jarrett
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