Ryanair has stated that its Q1 profits were adversely impacted by the “unnecessary closures” of European airspace for 18 days in April and May.

Published: 21 Jul 2010

Ryanair has stated that its Q1 profits were adversely impacted by the “unnecessary closures” of European airspace for 18 days in April and May.

According to Ryanair, the unnecessary airspace closures in April and May (following the Icelandic volcano) led to the cancellation of 9,400 Ryanair flights, and the loss of almost 1.5m passengers in Q1.

The airline has announced a Q1 net profit of €138.5m, an increase of one percent over last year’s Q1 figure (excluding pre tax exceptional costs of €50m from the volcanic ash airspace closures in April and May).

Total revenues rose by 16 percent to €896.8m due to an eight percent rise in traffic and a five percent increase in average fares.

Unit costs rose by nine percent due to higher fuel prices (excluding fuel they rose one percent) as sector length grew by 13 percent.

Yields rose by five percent due to a 13 percent increase in sector length offset by price promotions launched to get people flying again after the airspace closures. Ancillary revenues also rose at a faster rate than the growth in traffic to 23 percent of total revenue.

The airline also mentioned that the Irish government’s disastrous €10 tourist tax has caused a continuing collapse in Irish tourism. Traffic at Dublin airport in May fell 15% to just 1.6m, and is on track to fall by a further 3m to just 17m passengers in 2010, down almost 30% from the 23.5m pax. handled in 2008.

“Our outlook for the year remains cautious and unchanged. We expect passenger volumes will rise by 11% to 73.5m (i.e. before any volcanic ash disruptions). We anticipate that yields in Q2 will rise by between 10% to 15%, but since we have no visibility, we must remain cautious about yields for the coming winter (H2). We believe it is reasonable to expect that the yield increase for the full year will be within the range of 5% to 10% previously guided,” stated the airline.

“Unit costs excluding fuel will increase by approx. 4% (adjusted for sector length they will fall by 6%). As a result we expect full year net profits to rise by 10% to 15% or between approx. €350m to €375m, which remains in line with our previous guidance.”