Ryanair Raises Profits Despite Fuel Hike
By VICTORIA THOMSON, The Scotsman | Jun. 07, 2006
Budget carrier Ryanair has reported a better-than-expected 12 per cent rise in annual profits to 302 million (?208m), despite a 74 per cent increase in fuel costs to 462m as oil prices continued to climb.
Ryanair said it had attracted custom by not levying a fuel surcharge, unlike other airlines. Passenger numbers for the year grew by 26 per cent to 35 million.
But the airline said it was cautious about its prospects given higher oil prices and fierce price competition.
Total revenues for the year to 31 March were 28 per cent higher at 1.69 billion.
The carrier said that, while it was confident that passenger numbers would grow by about 20 per cent to 42 million in the current business year, profits were set to rise by a "more modest" 5-10 per cent in that period, assuming the price of oil stayed at $70 a barrel.
Ryanair's chief executive, Michael O'Leary, said
the carrier had sought to protect itself from future rises in oil prices by hedging 90 per cent of its fuel needs from June to October, at an average price of $70 a barrel.