Money lost on Aer Lingus investment
Ryanair today (June 2) reported a post-tax profit of €105m for the year ending March 31, a sharp drop of 78% year-on-year after writing down its investment in Aer Lingus.
Michael O'Leary, Ryanair's ceo, told a press conference Aer Lingus was not a bad investment "if it was run better". Ryanair owns nearly 30% of its rival and has twice attempted a hostile takeover.
Mr O'Leary said the loss on Aer Lingus amounted to around €300m, after an initial investment of around €400m.
The Irish budget airline also said revenue per passenger had fallen to €50 from €53 a year earlier. Average fare including ancillary charges fell to €40 from €44.
Despite the sharp decline in profits, Ryanair's result is a far cry from losses suffered by its larger network rivals such as British Airways and Air France KLM.
Mr O'Leary said passengers were switching over to take advantage of lower air fares. Ryanair saw volume grow by 15% last year.
Business passenger growth was greater when compared to "headline" volumes. Mr O'Leary said business class "was dead" and that BA had not yet woken up to that.
BA recently reported a pre-tax loss of £401m for 2008/09, its worst performance since the 1980s. AF KLM suffered a €814m net loss last year.
Ryanair, Europe's largest low cost carrier, saw passenger volumes increase 15% to 58.5 million from 50.9 million.
Despite volume growth passengers are becoming increasingly aware of extra charges such as food and for checking-in baggage, valuable sources of revenue for Ryanair.
Mr O'Leary hoped air travel on Ryanair would one day be free with all revenue coming from ancillary charges. He said Ryanair was actively researching toilet charges, first hinted at some months ago but widely dismissed.
He claimed aircraft manufacturer Boeing, keen to replace toilets with extra seats, was starting to investigate new door charging mechanisms which could be in place within the next 18 months.
Mr O'Leary compared the proposed "spend a penny" charge to that already in place at some London railway stations.
He said: "Our passengers can choose to pay a pound for the toilet, no one's forcing them to. It's an hour's flight, they'll survive."
Mr O'Leary said Ryanair's outlook for the coming year was positive and forecast a doubling in profits.
Ryanair said both profits and passenger volumes were set to double by 2012 with the most growth coming from European markets including Spain, Italy and France.
www.ryanair.com