Ryanair sees profits fall
Ryanair has announced a drop in annual profit despite ancillary sales offsetting a fall in fares.
The airline, which posted its full year results today, announced net profit of 523 million euros (£426 million) which was down 8% on 2013.
It said: "While disappointing that profits fell 8% to €523m due mainly to a 4% decline in fares, weaker sterling, and higher fuel costs, we reacted quickly to this weaker environment last September by lowering fares and improving our customer experience which caused H2 traffic to grow 4% as load factors rose 1%.
"Ancillary revenues grew 17%, much faster than traffic growth, and now accounts for 25% of total revenues."
Ryanair warned of weak fares this winter as the delivery of new planes means more capacity to sell.
The airline said it was committed to 6% capacity growth which could cause fares to fall by as much as 6% to 8%.
However it predicts strong summer bookings and higher charges for extras like carry-on baggage and on-board refreshments will lift profit by between 10 and 20% in the year to March 2015.
In its costs for 2015, Ryanair has accounted for a 25 million euro rise in advertising and marketing.
The airline has been working on customer service initiatives over the last six months.
Its new family product, which will launch in June, allows children (when travelling with their family) to receive discounts on allocated seats and bags, while families who travel frequently with Ryanair can qualify for discounts on future flights.
As part of its plan to court business travel agents and travellers, it is planning a business service from the Autumn which will include same day flight changes, bigger bag allowances, premium seat allocation, mobile boarding pass, and fast-track through security at many Ryanair airports.
Diane
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