Ryanair’s O’Leary in for bumper pay day
Monday, 01 Jun, 2010
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Ryanair’s outspoken boss Micheal O’Leary is to reap the benefits of his 16 years at the helm of the carrier with a €20 million pay out later this year as the company opts for a one-off special dividend to shareholders.
O’Leary holds 4% of Ryanair’s shares and his payout is part of a €500 million October reward. The news comes as the carrier reports a sharp rise in profits in its financial results to March 31 this year, to €319m from €105. Sales for the period rose from €2.94bn to €2.99bn.
The pay out comes as O’Leary and his team decide not to make any new plane deals in the near future. Howard Millar, the low cost carrier’s chief financial officer, said it made sense to return some money instead to the shareholders.
Ryanair is confident that despite the probability that fuel costs will rise this year, it will watch profits climb steadily to between €350m and €375m.
However Travelsupermarket.com’s Bob Atkinson says Ryanair’s glowing financial results actually show that the British passenger is getting craftier about dealing with the carrier.
He said: “Once again Ryanair has bucked the airline industry trend with a whopping rise in full year profits, up 204% on last year.
“Whilst on the face of it, all seems rosy and with continuing on time records that are the envy of the industry, this huge rise in profits also shows the airline is making ever diminishing returns from individual customers. Revenues generated per passenger have fallen by 11% in the last year whilst fares are down 13%.
"Ryanair would claim this is as a result of lowering costs further but it has also to do with the fact that the airline has had continuous sales over the last 12 months to get bums on seats. Ancillary revenues charged for bags, fees and vastly overpriced onboard food have only grown by 11% despite a healthy growth of passengers travelling of 14% year on year to 67m (making it the biggest carrier in Europe).
“So, are Europe’s customers finally getting the message to avoid all rip off charges by the continent’s busiest carrier? With the highest baggage charges, €40 return per bag this July and August, the highest card charges of €10 return irrespective of fare and the worst on board mark ups of food of well over 500% on high street prices, customers are finally learning how to play Ryanair at its own game.
"And with savvy customers set to continue this behaviour, the only way up for Ryanair now is to pack more bums on seats and go for passenger growth through fare promotions to gain higher revenues. And with a load factor of 82 per cent for the full year, that is 18 in every 100 seats still to fill.”
Dinah
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