Member Article

Ryanair reap profits as passenger numbers increase

Low-cost airline Ryanair have announced a rise in profits prompted by a 7% increase in traffic to 48m passengers.

Profits at the airline were up 10% to €596m, driven by a combination of strong summer bookings following the Olympics, a 6% rise in average fares, and lower than forecast fuel bill.

The firm hit out at European Governments and the EU Commission, suggesting they were stifling airline growth, and giving Gulf and Asian carriers a competitive advantage over their EU counterparts through “bureaucratic tendency towards re-regulation.”

Within the trading update, a statement said: “We expect market conditions in Europe to remain tough as recession, austerity, high fuel costs, and excessive Government taxes dampen air travel demand.”

In a separate statement in relation to the Ryanair bid for Aer Lingus, chief executive Michael O’Leary, said: “Consolidation is an essential part of making EU airlines more competitive. It has already taken place in core EU countries via IAG (Iberia and BMI merger), AF\KLM (including their investment in Alitalia) and Lufthansa (via takeovers of Austrian, Brussels Airlines and Swiss). That process is now spreading to peripheral countries as Aegean merges with Olympic in Greece, TAP is sold in Portugal and Ryanair bids again for Aer Lingus.

“As part of the EU’s Phase 2 review which began on August 29, Ryanair has submitted an unprecedented remedies package, under which multiple up-front buyers will commit to open new bases in Ireland, and enter all of the Ryanair/Aer Lingus crossover routes which are not currently served by other substantial airline competitors. We believe this is the first EU airline merger where the remedies proposed delivers not one, but at least two up-front buyer remedies, and where all of the “merger to monopoly routes” are remedied not just by passive slot divestments but by active up-front buyers and new market entrants.

“Ryanair is determined to explore all commercial options to address any competition concerns the EU may have in order to secure approval for its proposed merger. The recent BA/BMI (Phase 1) merger approval and the subsequent Aegean/Olympic merger proposal vindicate Ryanair’s view that its offer for Aer Lingus along with the radical remedies package will - if fairly assessed - secure EU competition approval.”

This was posted in Bdaily's Members' News section by Tom Keighley .