Ryanair’s profits rise — for now

BUDGET AIRLINE Ryanair has increased its profits by a quarter despite qualms over high oil prices and the impact of taxes.

The carrier announced record returns of 502.6m euros in the year to the end of March, after increasing passenger numbers by more than 3.5m and boosting its average fare by 16%.

But chief executive Michael O’leary has forecast stalling profits over the next 12 months, thanks to ever-rising fuel costs and the impact of a recession across Europe.

He also railed against governments treating the aviation sector as a “cash cow to fund taxation and policy failures” but admitted that the cost of travel from regional UK airports could be set to fall.

He said that more airlines could be set to crash out of the market under the pressure.

Dublin- based Ryanair carried 75.8 million people last year, and expects to have 79m passengers during the next year.

Ryanair warns its fuel bill will rise by 320m euros next year, likely leading to a fall in profits, particularly in the first quarter.

Mr O’leary said: “A number of EU airlines have closed this year including Malev (Hungary), Spanair (Catalonia), and Cimber Sterling (Denmark).

“Ryanair has responded tactically to these developments by opening a new base in Budapest, and expanding bases in Spain, Scandinavia and provincial UK to maximise capacity and minimise airfares for local consumers and visitors.

“We expect more European failures in 2012, as higher oil prices and recession continues to expose failed airline models as well as subscale or peripheral carriers.”

The outspoken chief executive argued that high passenger taxes imposed by governments damaged traffic — and therefore tourism and job creation — while a lack of action over runway capacity in the south east of England was encouraging airlines to bypass London in favour of other major European air hubs like Schipol and Paris Charles de Gaulles.

He warned that tough margins at highcharge airports like Dublin and Stansted made it “more logical” to ground aircraft rather than suffer losses at low winter yields.

“We remain concerned about next winter as we have zero yield visibility but expect recession, austerity, currency concerns and lower fares at new and growing bases in Hungary, Poland, provincial UK and Spain will make it difficult to repeat this year’s record results,” Mr O’leary said.

Mr O’leary also highlighted the acquisition of 25 new aircraft, the launch of 330 new routes, and an increase in revenue per passenger of 13%. Shareholders can expect a dividend return of 34c.

Picture: PA Profits have taken off at budget airline Ryanair.