The Irish low-cost airline said that net profit jumped 20% to €481m in the year to March, on revenues of €2.7bn. With fares down 1%, no fewer than 51m passengers plumped for its no-frills charms – also a 20% increase. Pretty impressive figures in a year when most airlines started to find life more difficult – ‘testimony to the strength of the Ryanair business model’, according to its ever-modest CEO Michael O’Leary.
Of course the big concern for Ryanair at the moment (other than ranting on about BAA and its Irish counterpart, natch) is the price of oil, which has gone through the roof since January. O’Leary said it had been able to hedge against the rise last year, so there wasn't a huge impact on profits. This year will be a different story - but he insisted that even if oil remains around the current ‘irrational price’ of $130 per barrel, Ryanair will still manage to break even for 2008-9. This doesn’t sound very ambitious, but not many airlines are likely to pull it off.
O’Leary was even trying to make a virtue out of it today. Unlike its competitors, he says, Ryanair is committed to absorbing fuel costs rather than passing them on to us passengers via surcharges. Instead, he’s been busy trimming Ryanair’s already meagre cost base – improving the efficiency of its aircraft, freezing pay across the board, slashing call centre jobs, and increasing discretionary charges. It’s a bit hard to imagine there was too much fat to trim, but he claims to have managed it (to be fair, just cutting out fines to the advertising regulator should boost the bottom line).
What’s more, he reckons that Ryanair’s cut-price model actually gives it an opportunity while the oil price is rocketing – as other airlines put up prices or even go bust, passengers will opt for its low-cost charms. ‘No airline is better placed in Europe than Ryanair to trade through this downturn,’ O’Leary boasted today.
But although this commitment to low fares sounds very impressive, Ryanair is of course being a bit disingenuous here. After all, the fare tends to be a pretty small part of the actual cost of flying Ryanair these days – even without fuel surcharges, you’ll still have to pay all the usual extras like the aviation insurance and wheelchair levy. Unless you plan to go on holiday with just your handbag, you’ll also have to stump up for the privilege of checking luggage into the hold (now four times as expensive as last year). And that’s not to mention the cost of buying stuff on board (once you've survived the stampede across the tarmac).
Still, Ryanair’s obviously doing something right; last month it carried a UK record 5m people. Just think of the scratch cards and Bullseye Baggies it can flog to that lot...