Ryanair fares well on rising fares

Ryanair's detractors now have another reason to gripe: the airline is sticking its fares up by 10%.

by Dave Waller
Last Updated: 12 Jan 2011

Ryanair reckons net profits for the rest of the year could be as high as €400m, rather than its previous projection of €375m, now that passengers are paying more to fly this winter than previously expected. This may prompt some added grumbles from passengers using the short-haul carrier, which seems to put customer satisfaction some way down the priority list – below such forward-thinking business staples as ‘rinsing them for all we can’.

Indeed, the airline already dished out a 12% hike in average fares earlier this year, which helped first-half revenues increase by nearly a quarter to €2.18bn. How much of that came from charging passengers for the privilege of taking a bag on holiday with them, it didn’t say.

Of course, boss Michael O’Leary can counter such sniping by pointing at the figures. With net profits for the first half up by 17% to €451.9m, his outfit remains one of the most consistently profitable in the industry. Just imagine what it’ll be like if and when he manages to get his proposed pay toilets off the ground and into his planes – those figures will go sky-high.

Indeed, Ryanair carried more passengers over the six-month period than British Airways does in a year. It had 40m people using its planes, and that’s a lot of pennies to be spent.

Airline figures tend to dip this time of year – which accounts for Ryanair’s stronger first-half performance. But it’s still been a good time for the long-suffering sector. BA returned to profit last week, for the first time in two years. And that performance was eclipsed by another flag carrier: Emirates has just announced that its profits more than quadrupled in the last six months, with revenues up by more than a third. And we thought the industry was meant to be in a rut?

O’Leary can be proud to count among such success stories. But it’s reassuring to know that he’s still shooting his mouth off – first about airport security (‘a whole panoply of security measures that don’t help security… annoy passengers and simply drive up the cost of air travel’). And then against rises in air tax. His solution to the latter was typically innovative: flogging passengers more stuff.

Over the past six months the average Ryanair journey length has grown by 12%. Leaving passengers 12% more time to buy tat. And making it 12% more likely that people will need that trip to the loo. Which will be tinkling to O’Leary’s ears.

Can Ryanair get away with putting prices up any further? Less us know what you think...





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