Ryanair, Europe’s largest low fares airline, today announced record half year profits of 329 million Euors (£220m).
It also gave details aggressive technology based expansion, in contrast to the fortunes of airline giant BA who, hit by extra terrorist security and high fuel prices, took a hit on its profits last week and exited the regional market with the sale of BA Connect.
Ryanair’s CEO, Michael O’Leary, said: “Ryanair has again, delivered record half year profits despite intense competition and very high fuel prices. The Ryanair lowest fare model has proven that it can generate increased profitability and significant passenger growth during difficult trading conditions while many of our competitors are struggling to deliver profits or are losing money.”
The Irish carrier recently launched a Bingo\Gaming website and said its 15 million unique visitors each month will now be offered the lowest fares and a flutter on the gambling website. It also referred to plans to mobile enable its entire fleet.
“As we roll out our onboard mobile phone system next summer, passengers will also be able to have a flutter whilst travelling on our 437 routes across Europe,” revealed the second quarter financial statement.
Ryanair traffic grew by 23% to 22.1m passengers, yields increased by 9% as total revenues rose by 33% to €1.256bn. Unit costs increased by 7.5% as fuel costs rose by 42% to €337m. Despite these significantly higher fuel costs, Ryanair’s after tax margin for the half year rose by one point to 26% as half year net profits increased by 39% to €329m.
British Airways, contrast also blamed fuel prices, but said the recent tightening of airport security cost it £100m in its second quarter results ending September 30, instead of the £40m it originally thought.
Willie Walsh, British Airways' chief executive, said: "Given the significant impact of the security disruptions, estimated at a cost of some £100 million, these are good results. Despite the extremely difficult operational environment, we have delivered improved revenue.”
But it also hinted at technology based plans to focus on customer service, saying it will enhance its website, ba.com to make it easier for customers to book online and get information about travel plans.
“It was an invaluable tool during the disruption in August because it gave hundreds of thousands of our customers quick and easy access to the very latest news,” said Walsh.
Excluding the £108m BA Connect write-down, the operating profit for the quarter was £240m and £451m for the half year giving an operating margin of 10.4% and 9.7% respectively. The pre tax profit was £282m for the quarter and £477m for the half year.