Ryanair predicts fair increases

by William ASTON on July 26, 2011

Ryanair has revealed that its fares are going to rise by 12 per cent on average in the financial year that leads up March 2012’s end, as fuel prices continue to rise.

Ireland’s leading budget airline has already purchased 90 per cent of the fuel it needs for this year, at prices 18 per cent above last year’s that are still below current prices. Pre-tax profits from the three months leading up to the end of last month £38m, which was up 50 per cent from the same period in 2010. Positively though, passenger numbers increased 18 per cent to 18m.

Michael O’Leary, Ryanair’s boss, said that the traffic figures were been flattered by “unnecessary airspace closures” brought about by the ash cloud from the volcano in Iceland. Considerably higher revenues were mostly offset by remarkably higher operating costs, with fuel rising 49 per cent, he added.

Ryanair has already announced that it will cut its winter capacity because of higher fuel costs. We’re passing those higher prices to consumers with slight increases in fares, however they’re still lower than in 2007, told Howard Miller, Ryanair’s deputy chief executive.

Last week, rival budget carrier Easyjet raised its forecast for profit for the year, saying that its new strategy, including appealing to more customers, was continuing to see “good progress”. Easyjet’s passenger numbers jumped up by 17.3 per cent, which is close to Ryanair’s growth of 18 per cent.

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