By Andrew Bushe
DUBLIN — Ryanair has bucked the trend in the European airline business by beating market expectations and reporting a 39 percent increase in after tax profits to 88 million euros (_69.31 million) for the first half of the year.
The six-month period to the end of September covered the impact of the foot-and-mouth crisis in Britain and Ireland, the economic slowdown and the U.S. terrorist attacks.
That combination sent Aer Lingus reeling, but Ryanair passenger traffic grew by 37 percent to 5.3 million passengers and load factors rose to 77 percent.
The no-frills airline results were issued Monday as Aer Lingus unions face a Nov. 30 deadline to agree the rescue plan and the immediate shedding of 2,026 permanent jobs.
If enough people do not come forward to avail of a buyout offer, chief executive Willie Walsh has warned, the airline will have no option but to implement compulsory redundancies.
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All that is available to fund the severance deals is _40 million, most of its being raised by selling two aircraft.
What is on offer is four weeks basis pay per year of service up to a maximum of two years’ pay. Pilots, who have different retirement deal, will do better. There will be ex-gratia payments available to them of _50,000 subject to 20 years service.
In contrast, during the first half of the year, Ryanair put five new 737-800 aircraft into service, launched its first Continental Europe base with seven routes at Brussels Charleroi, opened six new routes from London Stansted and one from Dublin to Edinburgh.
In the wake of the U.S. attacks, the airline lowered fares and increased availability.
“Our business so far has not been materially effected by the events of Sept. 11,” said chief executive Michael O’Leary. “Looking forward, we expect that the reduction in average air fares will be somewhat higher than budgeted. However, we equally expect to make up for much of this yield erosion with cost reductions and increased traffic volumes as we take market share from competitors.”
He described his company’s figures as “a great set of results.”
“Our continued obsessive cost management has meant that despite significant — and expected — declines in average fares, Ryanair continues to grow with stable margins and increased profitability,” O’Leary said.
Overall revenue was up 29 percent to 344.2 million euros. Net margins increased from 23.8 percent to 25.6 percent, the company said, while earnings per share grew by 34 percent to 24.31 cents per share.
O’Leary reiterated his objection to state aid for “basket case” EU airlines, claiming national flag carriers were losing money before the U.S. attacks and were using the tragedy as an excuse to cover their problems.
“In any fare war or recession, the lowest cost provider will always prevail,” he said.