Why isn’t David O’Leary Crowing?

By | Category: Travel rumblings

Despite the volcanic ash problems, the winter weather that caused closure at some airports and the economic downturn, Ryanair still managed to increase profits by 26% to £348 million.
They would say by hedging the price of aviation fuel, (they paid about $82 a barrel instead of the much higher prices that are around now) by cost savings and by all those add-ons that generated 22% of all their revenue, some £700 million. Quite obviously without those add-ons they’d be bust to the tune of £352 million. But they have about £2.6 billion in the bank which is there for a rainy day. Give or take, that’s about the total amount of revenue that APD in the UK is expected to generate this year. As their annual report says, in the current economic climate, there will be opportunities. To be used buying Aer Lingus? Or Ireland? Or something? Or supporting passengers? After all they’ve returned money to shareholders in the past few years. Maybe they’d like to return some to passengers who have put up with all the add-ons they’ve dreamed up over the years.
By my reckoning each passenger paid about £44.50 per flight (£89 return?) a far cry from the 1p flights of old and the £9.99 sale fare that is on their website today. This is up by approximately £4.75 per flight over last year which equates to about a 12% fare increase. Inflation has been under half that. So persuading us to part with more money whilst still being cheap is a good act.
Using the same maths, the true fare (after stripping out the add-ons) is £72.95 per return flight. But go back five years. In 2006, the average fare paid per passenger was £48.65 (£97.30 return?) so you can argue that despite the seemingly higher prices paid because of add-ons. Ryanair is actually charging less now than it did five years ago. And that is despite the increase in fuel, airport charges and APD where it is levied.
Now why isn’t David O’Leary crowing about that instead?

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