Ryanair sees quarterly profits take off

Ryanair announced its profits early on Monday, which showed a big improvement on last year's €21m for the same quarter. The increase was due to rising passenger numbers, which were up 11 per cent year to year, as well as lower fuel spending, which saved it 42 per cent on last year’s costs. The dip in spending on aviation fuel was helped by the company’s decision not to hedge its purchases, even at the height of oil price increases.

The airline took the opportunity to continue its battle against air passenger duty, with chief executive Michael O'Leary saying: "Traffic growth is strong but at much weaker yields due to the recession and the impact of tourist tax in Ireland and the UK …We again call on the Irish and British governments to follow the more sensible leads of the Belgian, Dutch, Greek and Spanish governments, all of whom have recently scrapped tourist taxes and have reduced airport charges, in some cases to zero, in order to stimulate tourism.”

As a result of increased costs related to passenger taxes and continued fare cuts Ryan said its full-year profits would be significantly impacted. It predicted they would now be at the lower end of its previous €200-300m range, partly as a result of its 13 per cent cut in fares in the first quarter. The company’s strategy is to be a low-cost provider, which it says will enable it to survive the downturn. However last week it announced it would almost halve the number of  aircraft it has based at Stansted airport to 24 this winter.

WHAT THEY ARE SAYING:Peter Morris, chief economist at aviation consultant Ascend on Bloomberg.com: "The low-cost carriers are like the hyenas of the pack, looking for where the best carcasses are … Even in good times, you see low-cost carriers picking up market share as they extend their networks and offer more choices. In a downturn, that dynamic accelerates, as you get network carriers downsizing equipment and reducing frequencies."

Nick Goodway in the Evening Standard: "These figures contrast strongly with its bigger rivals who are struggling through the recession. British Airways is expected to report a first-quarter operating loss of £100 million on Friday while Air France KLM will also report a loss this week and Lufthansa will just about break even."

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