The volcanic ash crisis hit first quarter profits at Ryanair as it was forced to cancel 9,400 flights with the loss of 1.5 million passengers at a cost of €50 million.
€50m ash crisis cost dents Ryanair Q1 profits
The volcanic ash crisis hit first quarter profits at Ryanair as it was forced to cancel 9,400 flights with the loss of 1.5 million passengers at a cost of €50 million.
Profits for the three months ending June 30 slumped by 25% to €93.7 million from €123 million for the same period last year.
The airline expects exceptional costs of €50 million by the year end once the full cost of the cancellations is known.
Excluding this figure, after tax profits for the three months edged up by just 1% to €138.5 million.
Disruption caused by the Icelandic ash cloud was compounded by a 17% rise in costs, mainly caused by rising fuel prices, which were up by 34% to more than €286 million.
However, Europe’s biggest budget carrier saw ancillary revenues jump by 23% in the quarter to €203.9 million – faster than the 8% rise in passenger numbers.
Ryanair attributed this to a combination of higher on board spend, an increased take up of priority boarding and higher internet-related revenues.
Total revenue per passenger was up by 7% helped by the rise in ancillary spend and a 5% increase in average fares. The number of passenger carried was up to 18 million despite the impact of the ash cloud.
Chief executive Michael O’Leary said: “Our Q1 profits were adversely impacted by the unnecessary closures of European airspace for 18 days in April and May.
“Despite these volcanic ash disruptions, Ryanair continues to increase traffic, yields and profits while most of our competitors are cutting capacity and reporting losses.”
He repeated calls for the coalition government to “urgently” break up Heathrow and Stansted owner BAA and scrap Air Passenger Duty “which has caused a significant decline in UK traffic and tourism”.
The outlook for the full year remains “cautious and unchanged,” O’Leary added, with passengers numbers expected to grow by 11% and net profits to rise by between 10-15% to more than €350 million.
