Ryanair Reports Record Profits

Ryanair, Europeå‘s low fares airline today (4 Novå‘02) released financial results for the half year ended 30 Sept showing record traffic and profit growth.  Passenger traffic for the six months grew by 37% to 7.84m.  Load factors increased by 6 points to a new high of 88%.  Average fares declined by 2%, however costs per passenger fell at a faster rate with the result that margins increased 6 points to 32% during the half year.  After tax profits have risen in the period by 71% to a new record of å€150.9m.
Traffic and revenue growth has been remarkably strong across all markets.  The fleet rose to 44 aircraft, enabling us to operate ten routes from our new Frankfurt Hahn base, as well as seven new routes from London Stansted.  Two new routes were added to our Brussels base and one each at Glasgow, Shannon and Dublin.  We also increased frequencies on some existing routes which resulted in substantial market share gains.  In August for example Ryanair overtook British Airways to become the No.1 airline on London-Brussels one of Europe’s most important business travel routes. 
At a time when most of our high fare competitors in Europe were reducing capacity and increasing fares, Ryanair was stepping up its growth, and doing so profitably.  Our profits for the half year already exceed the total profits for the entire previous year, and this is a remarkable achievement at a time when we are still opening up new routes and driving down air fares.

We expect this growth in traffic and revenues to continue and our recent announcement of four new routes from Frankfurt Hahn (to Barcelona, Bologna, Rome and Stockholm) and our eighth European base in Milan Bergamo (operating 6 routes to London, Paris, Brussels, Frankfurt, Barcelona and Hamburg) ensures that we are continuing to grow our business across Continental Europe, at a time when most other low fare carriers are adding capacity to/from the UK.
The most important feature of these results is our success in continuously driving down air fares and operating costs.  Over the past six months Ryanair’s average fare has fallen by 2%, but our operating costs have fallen by 11% on a per passenger basis.  Ryanair’s average fares continue to be over 50% lower than our nearest competitor and up to 80% lower than Lufthansa and British Airways.  Our increased profitability at these lower fares gives Ryanair even more capacity to reduce air fares, and further stimulate load factors, traffic and growth.
At the core of our cost reduction programme is the addition of more Boeing 737-800 aircraft.  These aircraft have delivered 45% more seats per flight than our existing Boeing 737-200 aircraft, whilst maintaining 25 minute turnarounds. The fact that the maintenance, fuel performance, and technical reliability of the 737-800 has exceeded even Boeing’s initial estimates, means that our costs will continue to decline over the coming years as we take delivery of 103 more 737 aircraft.
Our disciplined policy of hedging fuel has also provided certainty and savings over the past six months.  The uncertainty in the Middle East has meant that airlines who were buying fuel on the spot market were paying substantial penalties.  Ryanair has continued to purchase forward fuel at discounts to current spot rates, and we have 80% of our fuel requirements to the end of Sept’03 fully hedged at a lower cost than we paid over the past year.  As ever these costs reductions will be passed on to our customers in the form of lower fares.
Staff productivity continues to improve, much of it as a result of operating the larger 737-800 series aircraft.  Ryanair is set to carry more than 9,000 passengers per employee this year, a figure that is more than twice that of Southwest and over ten times greater than our principal competitor British Airways.
We continue to invest heavily in the quality of our operations.  Two new simulators have been ordered at a cost of US$20m to enhance the quality of our initial and recurrent pilot training as we double our traffic and fleet.  We have begun construction of our new aircraft maintenance centre at Glasgow Prestwick Airport, which will give us even more control over our maintenance costs, as well as further improving our maintenance quality control.  Ryanair will continue to invest heavily in the quality, reliability and serviceability of our fleet and the people who fly and maintain them.
We did suffer a short-term drop in service levels at Stansted Airport in Q.1 as a result of changing handling company from Servisair to Groundstar.  Ryanair have worked tirelessly with Groundstar at Stansted, and invested heavily in additional staffing and training to ensure that Groundstar are now operating to a standard that is better than that previously achieved by Servisair.
Ryanair remains committed to providing all of our passengers with the lowest fares at all times, whilst also delivering a programme of continuous improvement in customer service.  In August we published the Ryanair Passenger Service Charter which is by some considerable distance the toughest customer service charter applied by any European airline. 

This charter commits Ryanair to lower fares, No.1 on-time service, and a response time to complaints that is four times better than the EU Airline Charter. From now on Ryanair will also publish monthly customer service statistics as shown in the table below.  Our current rate of on-time departures, customer complaints and mislaid baggage complaints place us among the very best airlines for customer service.  Ryanair supports the EU’s proposal to publish monthly passenger service statistics for all EU airlines.
FOR MORE DETAILS SEE www.ryanair.ie