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04/06/2008
Ryanair Fares To Stay Low Despite Soaring Fuel Costs
Ryanair is planning to ground up to 10% of his fleet this winter in a move to counter crippling airport charges.
While the Irish budget airline saw full year after-tax net profits rise by 10% - other reports have cited 20% - to £381 million, the doubling of landing and handling charges by operator BAA still requires the carrier to cut costs.
Ryanair Chief Executive Michael O'Leary has told Sky News that he will not pass the soaring fuel costs to passengers but that if oil stays at the current price – at around $130 a barrel – the firm will only "break even" in 2009.
"Our fares will stay low but our profits will fall," he said.
Other measure taken to protect the company's profitability are a company wide salary freeze and job cuts at its Dublin call centre.
British Airways (BA) has already increased fuel surcharges.
A spokesman for BA said that the bill for fuel costs was expected to be £3 billion in the current financial year, which is 1 billion higher than last year.
Ryanair has carried 50.9 million passengers during the past year, which is 20% more than 2007.
Mr O'Leary has called for the "break up of the UK's BAA airport monopoly" in the belief that it will bring about "real competition" and improve passenger services and lower airport charges".
On Monday, the International Air Transport Association said that it may "rack up a net loss of $6.1 million" if the oil price remains stagnant.
See: Ryanair Flying High - For Now
(DS)
While the Irish budget airline saw full year after-tax net profits rise by 10% - other reports have cited 20% - to £381 million, the doubling of landing and handling charges by operator BAA still requires the carrier to cut costs.
Ryanair Chief Executive Michael O'Leary has told Sky News that he will not pass the soaring fuel costs to passengers but that if oil stays at the current price – at around $130 a barrel – the firm will only "break even" in 2009.
"Our fares will stay low but our profits will fall," he said.
Other measure taken to protect the company's profitability are a company wide salary freeze and job cuts at its Dublin call centre.
British Airways (BA) has already increased fuel surcharges.
A spokesman for BA said that the bill for fuel costs was expected to be £3 billion in the current financial year, which is 1 billion higher than last year.
Ryanair has carried 50.9 million passengers during the past year, which is 20% more than 2007.
Mr O'Leary has called for the "break up of the UK's BAA airport monopoly" in the belief that it will bring about "real competition" and improve passenger services and lower airport charges".
On Monday, the International Air Transport Association said that it may "rack up a net loss of $6.1 million" if the oil price remains stagnant.
See: Ryanair Flying High - For Now
(DS)
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