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Ryanair Passengers Up 3%, Profits Down 8%

Ryanair Passengers Up 3%, Profits Down 8%

Ryanair has announced full year to 31st March net profit of €523 million, slightly ahead of previous guidance. Traffic grew 3% to 81.7 million passengers. Revenue per passenger was flat, as strong ancillary revenue growth offset a 4% fall in average fares. Excluding fuel, sector length adjusted unit costs fell by 3%. Ryanair Aircraft

 

Highlights of the past financial year include:

  • Customer experience improving rapidly
  • New website launched with ‘fare finder’ facility
  • 121 new routes
  • 8 new bases – Athens, Thessaloniki, Brussels, Lisbon, Rome (FCO), Catania, Lamezia, and Palermo
  • 180 new aircraft ordered, delivery 2014 to 2018
  • Fares launched on GDS (Galileo and Worldspan) and Google flight search
  • Net profit of €523 million despite a 4% fall in average fares
  • €482 million share buyback completed

Michael O’Leary, said: “While disappointing that profits fell 8% to €523 million due mainly to a 4% decline in fares, weaker sterling, and higher fuel costs, we reacted quickly to this weaker environment last September by lowering fares and improving our customer experience, which caused H2 traffic to grow 4% as load factors rose 1%. Ancillary revenues grew 17%, much faster than traffic growth, and now accounts for 25% of total revenues.

“Forward bookings for summer 2014 are significantly ahead of last year, since we began offering lower fares and released our seasonal schedules earlier, and this should continue to deliver 2% higher load factors, and help us manage fares closer to departure as we have less capacity to sell.

“We recently opened four new bases at Athens, Brussels, Lisbon and Rome, and these are performing ahead of expectation. We announced three new bases for winter 2014 in Cologne, Gdansk, and Warsaw and we released our winter 2014 schedule three months earlier than last year. We expect these new bases will provide significant growth opportunities as we start deliveries (September 2014) of our new Boeing 737-800 NG aircraft order.

Customer Experience Improvement 

“We have worked hard over the last six months to improve customer experience with initiatives including (i) allocated seating, (ii) a simpler, easier to use, website with a ‘fare finder’ facility, (iii) free small second carry-on bag, (iv) ‘quiet flights’, (v) a 24-hour ‘grace period’ to correct minor booking errors, (vi) reduced boarding card and airport bag fees, and (vii) a new service to cater for groups and corporate travellers.

“Our new family product will launch in June and will allow children (when travelling with their family) to receive discounts on allocated seats and bags, while families who travel frequently with Ryanair can qualify for discounts on future flights.

“In the autumn we will launch a business service in conjunction with our frequency build on key business routes, which will include: same day flight changes, bigger bag allowances, premium seat allocation, mobile boarding pass, and fast-rack through security at many Ryanair airports. This service, together with our new GDS distribution strategy, will make Ryanair much more accessible and easier to use for business customers.


Digital and Distribution Improvements

“Our new digital strategy began to roll out last November with a much easier to use website, cutting the booking process from 17 to five clicks. More recently we unveiled a new website with ‘fare finder’, which enables customers to easily find our lowest fares, share these fares with their friends and book them quickly. The ‘My Ryanair’ registration service has been welcomed by customers with over two million already registered.

“We will continue to invest in web and digital improvements over the coming year, as we deliver an industry leading mobile app (tailored for smart phones and tablets) by mid-summer, and improve our digital marketing and CRM services for the benefit of all our customers.

“In April, we began extensive TV and outdoor advertising in major EU markets to promote our new website and recent customer experience improvements. These campaigns will continue through the year, as our marketing and advertising spend rises to approximately €35 million (from just €10 million last year), although this spend is still less than €0.50 per passenger.

“We have broadened our distribution by becoming the first low fares airline in Europe to partner with Google’s ‘Flight Search’ function, which is now available in the UK, France, Germany, Italy, Holland, Ireland, Poland and Spain (and more countries follow shortly). This partnership enables consumers to easily access and book Ryanair’s lower fares every time they search on Google.

“In April we began distribution on Galileo and Worldspan GDS systems, which allows travel and corporate agents to see and book Ryanair’s low fares. We are in talks with other GDSs (to broaden our distribution base) and hope to add more before year-end. Our new Groups and Corporate travel service launched in January and take up of these services is growing rapidly.”

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NEIL STEEDMAN has been a trade journalist, copywriter, editor and proofreader for 50 years, and News & Features Editor for ‘Irish Travel Trade News’ for the past 40 years.

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