Flying high Ryanair posts 13% rise in annual profits but new row with pilots looms

Low-cost airline Ryanair posted a 13 per cent rise in annual profits today but warned the recession across much of Europe will dampen growth this year.

The Dublin-based company, which operates on more than 1,600 routes, carried 79.3 million passengers in the year to March 31, an increase of 5 per cent on the previous year as revenues improved 13 per cent to €4.8 billion (£4.1billion).

in the budget airline jumped more than 6 per cent to a record high of €6.764 (572p).

Sky-high: Ryanair announced a 13 per cent increase in annual profits today which sent its share price up 5 per cent but it is embroiled in a row with its pilots of pay and working conditions.

Net profits rose to €569 million (£481.4 million) and the airline is hopeful of another rise this year, albeit at a slower rate of growth as economic conditions put pressure on average fares across the industry.

Ryanair expects traffic to grow by another two million passengers to 81.5 million in the current year, helped by this summer's addition of more than 200 routes and seven new bases, including at Eindhoven, Krakow and Marrakech.

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But it said this would still be slower than last year at 3 per cent compared 5 per cent. It is also waiting for deliveries to begin on 175 Boeing jets it ordered in March.

Chief executive Michael O'Leary said: ‘Ryanair is now uniquely positioned to offer many of Europe's airports sustained traffic growth in return for low cost, efficient facilities.

‘I am confident that in time this new order will enable Ryanair to extend its traffic leadership over Europe's airlines, and generate further returns for our shareholders.’

But net profit in the first quarter to the end of June will be lower as the busy Easter period fell in the fourth quarter, Mr O'Leary added.

Rising numbers: Ryanair expects traffic to grow by another two million passengers to 81.5million in the current year

‘They are playing down the yield environment, saying the first quarter softer than last year, but I'd be quite confident of a very good outrun in their peak summer trading period,’ said Donal O'Neill, an analyst with Goodbody Stockbrokers in Dublin.

‘It's not unusual that the guidance is quite cautious, but they are still forecasting higher profits,’ added Davy stockbrokers analyst Stephen Furlong. ‘Their cash generation remains spectacular.’

The company had net cash of €61million at the end of the year despite having returned almost €500 million to shareholders in November.

But Ryanair said it expects costs will continue to rise with higher oil prices again the culprit after its fuel bill increased by €290 million (£245.3 million) in the last financial year. Fuel now represents 45 per cent of all the airline's costs.

Ryanair's average fares increased by 6 per cent in the year to March, although this was outpaced by a 20 per cent jump in revenues from additional services such as reserved seating to €1billion - representing 22 per cent of all sales in the year.

The results came as the budget airline became embroiled in a fresh row with disgruntled pilots over employment conditions.

The Ryanair Pilot Group (RPG), which represents captains and co-pilots working for the airline, raised grievances over alleged changes to terms and conditions for aviators moving bases or undergoing command upgrades.

Ryanair has said its pilots enjoy the best security of employment of any in Europe and added it complied fully with Irish company and employment law.

An update on dealings with management, published by the Pilot Group this month, said: ‘Nothing is going to change for us as pilots until we stand together to show management that our terms & conditions of employment are no longer acceptable.

'If we do not change our mentality towards each other as a group, we will continue to individually suffer decreasing conditions with no bottom in sight.’

The group, which is not recognised by Ryanair, has made a series of allegations about the airline's treatment of its staff.

They include claims the airline decreased terms and conditions for pilots moving bases or undergoing command upgrades.

David O'Brien, director of flight and ground operations at Ryanair, wrote to the Pilot Group and said it complied fully with Irish company and employment law.

He said: ‘Under the Irish constitution, Ryanair pilots are free to join any groups they wish but this will not restrict the constitutional right of Ryanair and its people to negotiate directly on their terms and conditions, which have ensured that Ryanair pilots continue to enjoy perhaps the best security of employment of any pilots in Europe.’

Ryanair spokesman Robin Kiely said: ‘There is no RPG and any pilots who are unhappy at Ryanair are free to leave, as we have over 3,000 pilots waiting to join.’

Elsewhere, Ryanair's largest low-cost rival easyJet last week said it expected 4 per cent growth in revenue per seat in the next six months and improved profitability for the full-year.

Ryanair shares are up 50 per cent since the start of the year, compared with a rise of some 55 per cent at rival easyJet and 18 per cent in the Irish stock market as a whole.