Ryanair says fares will continue to rise

Jan 29, 2013

Courtesy Wikipedia Commons

Courtesy Wikipedia Commons

 

THINGS are looking up for budget carrier Ryanair, which reported improved Q3 (Oct-Dec 2012) profits – 18.1m euro (US$24.3m), up 21 per cent. Consequently the airline has revised its full-year profit forecast from the previous high-end of 520m euros to 540m euros.

This may indicate a slow recovery of the aviation market since rival Easyjet also reported reduced losses for the first half of the year on the back of rising revenues. Ryanair has benefited from robust bookings particularly during the Christmas travel peak, lower costs including that of fuel slightly below the expected level, and higher airfares averaging an 8 per cent increase in the costs. Reportedly, increased demand for priority boarding has also contributed to the carrier’s performance vis-à-vis ancillary revenue.

Ryanair has said the fares will continue to rise in its new financial year while capacity increase will slow down at 3 per cent the most compared to the current 4 per cent. This should further boost the bottom line if bookings continue to improve.

An interesting development in the offing for Ryanair is its third attempt to take over rival Aer Lingus – the former already owns close to 30 per cent of the latter. Ryanair deputy chief executive Howard Millers has said he could not see why the European Commission would block the 694m euro deal and does not rule out an appeal if that happens.

For all the hard knocks that Ryanair gets about its “harsh” product, it seems to be doing well. So, what price service when cost becomes the primary driver in a consumer’s choice?

 

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About David Leo
David Leo has more than 30 years of aviation experience, having served in senior management in one of the world's best airlines and airports. He continues to maintain a keen interest in the business, writes freelance and provides consultancy services in the field.

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