Ryanair profits jump by two-thirds following image makeover
- Credit: PA
Budget airline Ryanair saw profits growth take off last year as a revamp designed to improve its image and attract business customers sent earnings soaring by 66%.
The Irish no-frills carrier, which is the largest operator out of Stansted Airport, posted post-tax profits of 867million euros (£614m) for the year to the end of March, up from 523m euros (£370m) the previous year.
It has bounced back from a drop in annual profits in the previous financial year, its first for five years, thanks to a major push to improve its customer service as part of a programme called Always Getting Better, as well as an expanded business schedule.
Passenger traffic leapt 11% to 90.6m customers over the year to March 31. Ryanair chief executive Michael O’Leary said the customer services programme had attracted “millions of new customers”.
He added: “Our AGB (Always Getting Better) programme is transforming our customer experience, our service, and the way we listen and respond to our customers. We have won substantial traffic and share gains in all markets.”
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The group had increased its guidance for the full-year figures five times ahead of the results and predicted post-tax profits of between 940m euros (£664m) and 970m euros (£685m) for the year to next March.
But the group cautioned that it could face tough competition amid an industry-wide move to slash prices, which could impact its business over the winter season.
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It said: “It would be foolish not to expect some irrational pricing response from competitors who cannot compete with our lowest costs and fares.”
Falling oil prices have also provided a boost, with the group reporting an 11% fuel saving per passenger.
And the group said revenues rose 12% to 5.65billion euros (£4bn) over the year to March.
Ryanair also gave a cheery outlook for the summer season as it said forward bookings were 4% ahead of a year earlier, while its average load factor - how well it is filling its planes - grew by 10% over the first four months of the year.
But this growth in load factor will slow to 1% or 2% over the peak summer months, it said.
Ryanair has rolled out a raft of initiatives to win over fliers, including allocated seating, new seats with more legroom, improved in-flight meals, extra carry-on luggage and more business-friendly schedules.
It is also promising new aircraft interiors and updated uniforms for cabin crew, with other plans under a second year of its customer programme.
The group is also leasing six aircraft over the summer period to meet growing demand from fliers and boost its 320-strong fleet of planes.