Ryanair's ancillary revenues up by 19pc in Q3
Published: 03 Feb 2009: Ryanair's ancillary revenues grew by 19 percent to €132m in the third quarter even as the airline slipped into the red for the first time since the company went public in 1997.
The Irish airline posted losses of €102 million for the three months ending December 2008, compared with a €35 million profit during the same period the previous year.
Average fares fell by 9 percent to €34, while fuel costs rose by 71 percent to €328m. Revenues rose by 6 percent to €604.5m, as traffic grew 13 percent to 14m, as more consumers switch to Ryanair´s low fares from high fare competitors.
Ryanair´s CEO Michael O´Leary said: "Our Q3 loss of €102m was disappointing, but in line with expectations, and was almost entirely due to a €136m increase in fuel costs."
Average fares (due to recession and weaker Sterling) fell by nine percent to €34, but this decline was largely funded by a three percent reduction in non fuel operating costs.
"The general economic environment remains extremely difficult, as the recession saps consumer confidence, but this is proving to be good for Ryanair´s traffic growth, as more and more passengers switch to Ryanair´s lowest fare lowest cost model. Many of our competitors have in recent months reported short-haul traffic falls, while Ryanair continues to grow. We will continue to lower fares to maintain our traffic growth and high load factors," said O´Leary.
"Ancillary revenues grew by 19 percent to €132m, and now account for 22 percent of revenues (19 percent last year). We expect our onboard mobile telephony service to become operational at the end of February on 20 Dublin based aircraft, and this trial, which will last for six months should be extended to some 40 aircraft by the end of the summer. We expect initial revenues to be small, but believe that in-flight communication will be a strong source of ancillary revenue growth in future years," he said.
Ryanair said that its lack of hedging in the fourth quarter would enable it to take full advantage of the low oil price. As a result, the carrier upgraded its full-year profits forecast to between €50 million and €80 million yesterday. Its previous guidance had been to break even.