Ryanair reports record profits but issues warning

Europe’s biggest budget airline Ryanair today posted a record annual profit of €503 million.

But the Irish carrier warned that surging fuel costs and worsening economic outlook in Europe meant profits were likely to fall in the coming year for the first time since 2009.

The on-going financial crisis in Europe and high fuel costs would cut its profit to between €400 million and €440 million in 2013, the airline forecast.

Dublin-based Ryanair also confirmed it would pay out €483 million to shareholders in just its second dividend payout since floating in 1997.

Ryanair flew 75.8 million passengers in the period, up 4.9%.

Chief executive Michael O’Leary said: “Recession, austerity, currency concerns and lower fares at new and growing bases … will make it difficult to repeat this year’s record results.”

The airline has raised fares in recent months to make up for more expensive fuel and reduced capacity. But it warned it would be unable to pass on all of the higher fuel costs in the coming year.

O’Leary added: “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.

“We expect that any increase in fares will only partially offset higher fuel costs, and accordingly we are guiding net profit in FY13 subject to final yield outturn will be lower than FY12 in a range of between €400m to €440m.”

Ryanair said it is continuing with a reserved-seating trial, successfully extended to all routes in January, as it further seeks revenue outside tickets sales and selling food and drink.

The budget carrier also criticised the UK government’s decision to raise Air Passenger Duty.

O’Leary said: “Despite a rising number of airline failures and record airline losses, many of Europe’s governments continue to treat aviation (and airline passengers) as a cash cow to fund their taxation and/or policy failures.

“The UK and Germany have increased passenger taxes, which has damaged their traffic, tourism and job creation numbers.

“UK APD has caused traffic to decline by 6% since 2007, while the UK goverment’s “do nothing” policy about runway capacity in the south east is encouraging traffic and tourism to bypass high cost London airports in favour of expanding airports in Spain, France, and Holland.”

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