Ryanair Sees Revenue Boost But Profit Slides

Budget airline Ryanair has seen revenue growth of 11% in the first quarter of 2012, boosted by a 6% increase in passenger numbers.

However there has been a 29% fall in like for like quarterly profits, compared to last year, as the company has blamed a 27% rise in fuel costs for the dip.

CEO Michael O'Leary said: As we previously guided, significantly higher fuel costs caused Q1 profits to fall by euro 40m (£31.29m) to euro 99m (£77m).

"Our 6% traffic growth combined with a 4% rise in average fares led to an 11% increase in revenues."

Mr O'Leary admitted that the low-cost airline was braced for a difficult winter as austerity measures and the eurozone crisis hit demand.

The Dublin-based carrier, which operates more than 1,500 flights a day across 28 countries, is expecting traffic growth of 1% between September and March, down from 7% this summer following winter capacity cuts.

Ryanair reported a 15% rise in ancillary sales – which includes baggage and administration fees, as well as in-flight food and drink – to 286m euro (£223.9m).

Ancillary sales now account for 22% of all revenues.

The carrier, which has a fleet of 294 planes, said growth in the first quarter was dampened by the EU-wide recession, austerity measures and also heavy discounting at new bases including Cyprus, Denmark and Hungary.

The airline will see its 51st base open in Maastricht, in Holland, in December, and it hopes to add up to two new bases later this year.

Mr O'Leary hit out at the Spanish government for hiking airport taxes at the start of July and welcomed a Court of Appeal decision to dismiss BAA's latest appeal against a Competition Commission recommendation to sell Stansted Airport.

Ryanair mounted a fresh bid to seize control of rival Aer Lingus last month by tabling an offer valuing the company at around 694m euro (£559.6m).

The airline, which already owns a 29.8% stake in Aer Lingus, requires approval from EU regulators for the deal to go ahead. A previous takeover attempt in 2006 was rejected.

Ryanair said it would be "inappropriate" to comment while the airline is engaging with regulators.