Tag Archives: ryanair dublin

Ryanair carries over 9 million passengers in August, the first European airline to do so

Ryanair (Dublin) celebrated a milestone in August and issued this statement (while taking a swipe at Aer Lingus):

Ryanair released its passenger and load factor statistics for August 2013:

  • Traffic increased by 1% to over 9 million passengers.
  • First European airline ever to carry 9 million passengers in one month.
  • Annual traffic to end August grew 2% to over 80 million passengers.
  • Load factor increased 1% to 89%.
  • Ryanair carries 9 million passengers in a month, Aer Lingus carries 9 million in a year!
Aug 12
Aug 13
Change
Yr to Aug 13
Passengers
8.90M
9.02M
+1%
80.2M (+2%)
Load Factor
88%
89%
+1%
82%

Ryanair 9m passengers in Aug

Ryanair celebrated its first ever 9 million passenger month by releasing 900,000 seats for travel in October and November at fares starting from just €14.99 one-way.

Ryanair: AG Slide Show

Ryanair to add more Ireland-UK frequencies in response to Aer Lingus increases, takes another swipe at the UKCC

Ryanair (Dublin) always famous for its comments about government agencies, has issued this new scathing comment and news:

Ryanair, the UK’s largest airline, today (31 July) announced that it would add additional daily frequencies from October on its five main Ireland-UK routes in a direct response to similar flight increases recently announced by Aer Lingus for the 2013-14 winter schedule. Aer Lingus’ decision to increase flight frequencies on these UK routes further undermines the discredited UKCC investigation into Ryanair’s 6 ½ year old minority (29%) stake in Aer Lingus. Confronted with incontrovertible evidence that competition between Ryanair and Aer Lingus has intensified, the UKCC has been reduced to inventing fairytale future “concerns” that Ryanair has “influence” over Aer Lingus or that this stake has or will lead to a lessening of competition.

The UKCC, in its provisional findings, has ignored, or excluded, 6 ½ years of evidence which totally disproves their bogus claims. It has failed to produce any evidence that competition would be lessened (or UK consumers penalised) when the European Commission recently (Feb 2013) prohibited Ryanair’s offer for Aer Lingus on the very grounds that competition has intensified between the two Irish airlines over the past 6½ years. If, as the UKCC now claims, Ryanair has “influence” over Aer Lingus which “might” lessen competition, then it should explain why Aer Lingus has recently increased flights on the five main Ireland-UK routes or why Ryanair is now responding with yet more flight frequency, which will lead to lower prices and better deals for those few UK consumers who actually fly Aer Lingus.
Ryanair will add at least one additional daily return flight from October 2013 to each of its top 5 Dublin-UK routes including London (STN), Manchester, Birmingham, Edinburgh and Bristol as follows:
RYANAIR INCREASES ON 5 DUBLIN-UK ROUTES – WINTER 2013-14
Route
Daily rotations Nov 2012
Daily rotations Nov 2013
Dublin – London (STN)
7
8
Dublin – Manchester
4
5
Dublin – Birmingham
3
4
Dublin – Edinburgh
3
4
Dublin – Bristol
2
3

 

Ryanair continues to question why the UK’s OFT and CC have wasted millions of UK taxpayer funds investigating a 6 ½ year old failed merger between two Irish airlines (which has little, if any, impact on any UK consumers) while at the same time neither quango took any action whatsoever on behalf of UK consumers when BA acquired BMI, or previously when Easyjet acquired GB Airways. The UKCC has failed to explain this glaring lack in consistency particularly when neither the EU nor the Irish competition authorities had any concerns about Ryanair’s 6 ½ year old minority stake.
Since the UKCC inquiry has been unable to produce one shred of evidence that competition between Aer Lingus and Ryanair has lessened over the past 6 ½ years and since the UKCC has been forced to accept the EU’s ruling (that intensified competition has benefited consumers) this has reduced the UKCC to flailing around, inventing fairytale future “concerns” so that it can ignore the inconvenient truths of the last 6 ½ years of evidence.
The UKCC’s 3 fairytale future “concerns” are disproven by the past 6 ½ years of evidence as follows;
a) That Ryanair “might” block a rights issue by Aer Lingus: however the UKCC have ignored the inconvenient truth that over the past 6 ½ years – Ryanair has repeatedly confirmed it will support take up rights to prevent dilution.
b) That Ryanair “might” block a disposal by Aer Lingus of its Heathrow slots (despite the fact any such disposal would lessen competition between the two airlines) while ignoring the inconvenient fact that Aer Lingus, as recently as April 2013, disposed of a pair of Heathrow slots without any objection or block by Ryanair.
c) That Ryanair “might” prevent another EU airline from acquiring Aer Lingus, and/or “squeezing out” Ryanair. Again the UKCC has ignored the inconvenient truth that over the past 6 ½ years, no other EU airline has shown any interest in acquiring Aer Lingus and almost all other EU airlines have publicly stated that they have no interest in acquiring Aer Lingus.
In order to destroy any remaining shred of credibility from these bogus and invented “concerns” Ryanair has offered to unconditionally and irrevocably dispose of its 29% minority shareholding to any other EU airline who offers for, and successfully acquires 50.1% of Aer Lingus (which is far below the legal 80% squeeze out threshold). This undertaking has been dismissed by many commentators on the very obvious grounds that no other EU airline wishes to acquire Aer Lingus, another inconvenient fact which the UKCC has conveniently ignored. Ryanair’s undertaking removes any possibility that it can or could block an acquisition of Aer Lingus by another EU airline and sheds this UKCC process of any credibility whatsoever.
The UKCC’s case now lies in tatters, as Simon Polito and his team flounder around, looking to invent new and even more fairytale “concerns” when the inconvenient truth is that 6 ½ years of evidence proves that Ryanair’s minority stake has resulted in intensified competition between the Irish airlines to the benefit of UK consumers. Finally, the UKCC has produced no shred of evidence whatsoever that any other EU airline – other than Ryanair – has any interest in acquiring Aer Lingus.
Copyright Photo: Lucio Alfieri/AirlinersGallery.com. Boeing 737-8AS WL EI-DCL (msn 33806) in the original Dreamliner colors taxies at Bologna.
Ryanair: AG Slide Show

Ryanair’s 1Q profits falls 21% as previously guided

Ryanair (Dublin) has issued this financial report for its fiscal first quarter:

Ryanair has announced that Q1 profits, as previously guided, fell 21% to €78m as traffic grew 3% to 23.2m. Ave. fares fell 4% due to the timing of Easter and the impact of the June French ATC strikes but revenue per pax. rose 1% due to strong ancillary growth. Unit costs rose 4% mainly due to a 6% increase in fuel costs. Full year guidance, remains unchanged.

Summary Q1 Results.

Q1 Results (IFRS) €

June 30, 2012

June 30, 2013

% Change

Passengers

22.5m

23.2m

+3%

Revenue

€1,284m

€1,342m

+5%

Profit after Tax

€99m

€78m

-21%

Basic EPS(euro cent)

6.86

5.42

-21%

 

 

 

Ryanair’s CEO, Michael O’Leary, said:

“As previously guided higher fuel costs and the timing of Easter led to Q1 profits falling €21m to €78m. Ancillary revenues grew by 25% to €357m (27% of total revenues) driven by the successful development of reserved seating, priority boarding, and higher admin\credit card fees.

Unit costs rose 4% in line with the increase in sector length. Fuel increased 6% to €577m or 47% of total operating costs. Excluding fuel, Q1 unit costs rose by 6%, slightly faster than the increase in sector length, due to a 2% rise in flight crew pay, and increased Eurocontrol, Spanish airport, and Italian ATC charges. We are 90% hedged for FY14 at $980 p.t and 70% hedged for H1 FY15 at $935 p.t. We have extended our H1 FY15 fuel currency hedge on recent dollar weakness which delivers a 3% cut in our fuel cost per pax. for the 70% already hedged in H1 FY15.

Our seven new bases Eindhoven and Maastricht (Holland), Krakow (Poland), Zadar (Croatia), Chania (Greece), Marrakesh and Fez (Morocco)) are performing well. We plan to announce more new routes and new bases later this year as we exploit significant growth opportunities in markets where competitors including Airberlin, Alitalia, Iberia, LOT Polish, and SAS are cutting back. We are in ongoing negotiations with MAG, the new owners of Stansted airport to reverse six years of record traffic declines, but there is no guarantee that any deal will be agreed.

UK CC Enquiry.

Despite no evidence of any material influence, and compelling evidence that competition between Ryanair and Aer Lingus has intensified (rather than lessened) over the past 6½ years, we now expect that the UKCC will unlawfully attempt to force us to sell down most, if not all, of our 29.8% stake in Aer Lingus on some baseless or invented claim that competition in the future “might” be lessened. Given the CC’s total lack of evidence they are now reduced to dreaming up bogus future concerns that Ryanair “might” prevent another EU airline acquiring Aer Lingus, despite Ryanair’s repeated public statements that we would consider any offer by another EU airline to acquire Aer Lingus, and/or acquire Ryanair’s shareholding.

We have now eliminated any remaining shred of credibility from this enquiry, by offering to unconditionally sell our 29.8% stake to any EU airline which offers for, and successfully acquires, over 50% of Aer Lingus, despite 6½ years of evidence that no EU airline other than Ryanair has any interest in buying, or investing in, Aer Lingus. The UK CC has no credibility in this case having taken no action whatsoever on behalf of UK Consumers in earlier mergers when BA bought BMI or Easyjet bought GB Airways. Yet 6½ years after one Irish airline (Ryanair) bought 29.8% of Aer Lingus (an Irish airline which carries very few UK consumers), the UK CC is now ignoring evidence to pursue an apparently pre-meditated decision to force a more draconian sell down on Ryanair than they required in the earlier BSkyB/ITV case. This is absurd in the case involving 2 Irish airlines when Aer Lingus affects or carries very few UK consumers. Ryanair will strenuously appeal any such ruling, which is clearly unjustified by the evidence in this case, and we will insist that any such order cannot be enforced while we appeal the EU Commission’s February 2013 Prohibition Decision before the EU Courts.

Aircraft Order and Shareholder Returns.

Shareholders have recently approved our order for 175 Boeing 737-800 aircraft for delivery over a five year period between September 2014 and December 2018. This has allowed us to raise our growth targets by 38% to 110m passengers by FY19 (previously 100m) and our fleet to 410 (previously 375).

The strength of our Balance Sheet with Q1 gross cash of €3.6bn and net cash of €191m, (despite another recent €177m share buyback), remains unmatched in our industry. This strong cash position allied to the Capex certainty we now enjoy, following the recent aircraft order, enabled us to announce plans to return up to €1bn to shareholders over the next two years. At least €400m via share buybacks in FY14, and up to a further €600m in special dividends or share buybacks in FY15, subject to current fuel, yields and profitability trends continuing. This further €1bn brings to over €2.5bn the total cash returned to Ryanair shareholders in recent years, which is over 4 times the €585m originally raised from shareholders since our IPO.

Outlook.

We expect Q2 yields to rise despite last year’s challenging (post-Olympic) comparables, although yields on close-in summer bookings have been slightly weaker in recent weeks due, we believe, to the heat wave in Northern Europe. As ever, our outlook remains cautious for the full year as market conditions are tough with recession, austerity, high fuel costs, and excessive Government taxes (most recently in Belgium) impacting air travel demand and yields. While we expect full year traffic to grow 3% to 81.5m, we still have no visibility over next winter’s yields, and on the basis that the recent yield weakness in close-in summer bookings does not continue, we see no reason to change our full year profit after tax guidance which remains at between €570m to €600m”.

Copyright Photo: SM Fitzwilliams Collection. Boeing 737-8AS EI-CSA (msn 29916) at the Dublin hub promotes Scotland as a destination. Ryanair will be adding more advertising.

Ryanair: AG Slide Show

Ryanair gives up, will sell its 29% Aer Lingus stake to another EU airline

Ryanair (Dublin) is giving up on taking control of rival Aer Lingus (Dublin). The airline issued this statement:

Ryanair on July 23 confirmed that, as part of its ongoing remedies discussions with the UK Competition Commission (CC) in a case where the CC have produced no evidence whatsoever of any lessening of competition as a result of Ryanair’s 6½ year old 29% shareholding in Aer Lingus, Ryanair has now offered the following undertaking to the CC:

In order to dispel the CC’s unfounded and invented “concern” that Ryanair’s shareholding may prevent Aer Lingus from being acquired by another EU airline, Ryanair will undertake to unconditionally sell its 29% shareholding to any other EU airline that makes an offer for Aer Lingus and obtains acceptances from 50.1% of Aer Lingus shareholders.

The above remedy is without prejudice to Ryanair’s vehement objection to the CC’s manifestly false conclusion that Ryanair has influence over Aer Lingus’ commercial strategy and/or that Ryanair’s 6½ year old minority shareholding in Aer Lingus has resulted in a lessening of competition. This conclusion is flatly contradicted by 6½ years of evidence, by the European Commission’s findings in February 2013 that competition between Ryanair and Aer Lingus has intensified, and by the evidence submitted even by Aer Lingus and the Irish Government (to the EU), which proves that competition between Ryanair and Aer Lingus intensified to the benefit of consumers over the last 6½ years.
Ryanair’s Robin Kiely said:
“It is clear from the CC’s own Provisional Findings report that it has found no evidence of any lessening of competition between Ryanair and Aer Lingus. In fact, Ryanair’s recent (3rd) offer for Aer Lingus was prohibited by the EU precisely because of the evidence, submitted by both Aer Lingus and the Irish Government, that competition between Ryanair and Aer Lingus has “intensified” during the past 6½ years.
These inconvenient facts have reduced the CC’s Simon Polito (Chairman) and Roger Davis (Member) to inventing new and fantastical “concerns” in order to justify their apparently premeditated and biased “thinking” that Ryanair should be forced to sell down this 6½ year old minority stake. The only remaining “concern” they can now dream up is that Ryanair’s 29% stake “might” prevent another EU airline buying Aer Lingus; despite 6½ years of evidence (and repeated public statements) that no other EU airline has any interest in acquiring Aer Lingus.
In order to remove any remaining shred of credibility from this CC process and eliminate any doubt about this imaginary albeit non-existent “concern”, Ryanair has now agreed that it will unconditionally sell its 6½ year old minority stake to any other EU airline which makes an offer for, and acquires more than 50.1% of, Aer Lingus shares, at the same price and terms which are accepted by these other 50.1% of Aer Lingus shareholders. This remedy unconditionally removes any ability by Ryanair to block any future takeover of Aer Lingus by another EU airline.
This bogus CC “concern” has now been fatally undermined thereby removing any requirement for a divestment of Ryanair’s 6½ year old minority shareholding which even the CC now admits hasn’t given Ryanair any influence, and Aer Lingus admits has led to intensified competition to the benefit of the perhaps 1 or maybe 2 UK consumers who even fly Aer Lingus.”
Copyright Photo: SM Fitzwilliams Collection/AirlinersGallery.com. Boeing 737-8AS EI-CSE (msn 29920) taxies at the Dublin hub. The airframe has since gone on to Gol as PR-VBE.
Aer Lingus: AG Slide Show
Ryanair: AG Slide Show

 

Ryanair calls for three new London runways

Ryanair (Dublin) has issued this statement calling for three new London runways at three airports:

Ryanair, the UK’s only ultra low cost carrier (ULCC) on July 18 made a submission to the UK Government’s Airports Commission, calling on Sir Howard Davies and his team to resolve the 30 year old runway shortage in the South East of England by recommending that each of the three main London airports, Gatwick, Heathrow and Stansted, be allowed to develop, at the earliest possible date, one new additional runway each, which will result in three new runways serving London, which will finally address runway capacity in the South East for the next 50 years, thereby allowing competition between the three airports, to ensure that these new runways are delivered in a timely, efficient and cost competitive manner which will maximize the gains for UK consumers and visitors.
Ryanair in its submission has rubbished any new Greenfield airport plan such as ‘Boris Island’, which it criticized as being more of the failed political interference that has bedevilled UK infrastructure projects over the past 30 years. Ryanair believes that any new greenfield airport will take many decades to deliver, and will result in vast overspending and inefficiency due to the absence of any existing airport or ground transport infrastructure at any such greenfield site.
The approval of three new London runways will prevent the kind of regulatory gaming which has bedevilled London runway capacity under the failed BAA airport monopoly, and the “inadequate” CAA regulatory regime over the past 30 years. This failed airport regulatory model allowed the BAA monopoly to constrain capacity delivery, in order to charge monopoly prices to airlines and consumers, which has done such damage to UK aviation and tourism since the BAA airport monopoly was first privatised in the 1980’s. Ryanair has called on the Airports Commission to adopt its 3 new London runway proposal, which is the timeliest, most efficient long-term solution to the chronic runway shortages currently suffered by all airlines and passengers at the 3 main London airports. This new 3 runway strategy will restore London’s leadership of European aviation – without any political funding – and enable the South East to respond competitively to the new runway developments which have recently been completed in Madrid, Paris and Frankfurt.
Ryanair’s Michael O’Leary said:
“Three new runways at the three competing London airports is the only sensible and consumer focused solution to the chronic runway capacity shortages in London and the South East of England.  We cannot wait 30 years and allow billions of pounds to be wasted on ‘Borris Island’.  Because each airport and each airline (apart from Ryanair) wants to limit competition, they tend to advocate only one runway solutions and only at their airport. This means that UK aviation will continue to be hand-cuffed by political interference, and “NIMBY” opposition which has stymied aviation policy for the last 30 years. The UK in general and London in particular is being left behind by new runway developments in competitor cities such as Frankfurt, Paris and Madrid.

The failure of recent UK Governments to stand up to misleading environmental groups and their willingness to pander to narrow ‘NIMBY’ interests at individual airports has allowed UK aviation, tourism and job creation to be hijacked by backward looking luddites. Sadly the very appointment of the Davies Commission is just the latest example of the spineless approach of David Cameron’s Government which talks about stimulating growth and job creation, but instead of pursuing growth policies they pander to tree huggers and NIMBYS.

Ryanair believes that the solution to the runway shortage in London is both simple and straightforward. Thanks to the recent break up of the BAA airport monopoly, London now has three competing airports, but no spare runway capacity. Instead of pandering to the expensive lobbyists of Ferrovial and Heathrow, the Davies Commission should recommend that three new runways be developed and allow the marketplace and competition between these three airports to deliver timely, cost efficient and consumer friendly runway capacity growth in the manner that will most benefit UK consumers, UK tourism and UK job creation. These 3 new runways will in turn deliver an additional 100m passengers p.a., which – given Airport Council International figures – will sustain about 100,000 new jobs across the 3 London airports. These 3 new runways will also exploit the advantage of the existing road, rail, underground and coach infrastructure which already serves these London airports, without the waste, delay and inefficiency of trying to develop a new greenfield airports and ground transport to serve them.
Approving 3 new runways at Heathrow, Gatwick and Stansted is also the only way to keep Ferrovial/Heathrow honest as it promotes its plans to waste further billions on inefficient, gold-plated facilities which will allow them to again ‘game’ the CAA’s inadequate regulatory regime to further penalise airlines and passengers at Heathrow, with much higher charges. Competition between the airlines has significantly reduced UK air fares over the past 30 years to such an extent that Ryanair now carries more passengers than British Airways and EasyJet combined. The Davies Commission (while being another example of David Cameron kicking the can down the road) offers a unique opportunity to finally introduce effective competition and excess capacity in London’s runway infrastructure and Ryanair hopes that Sir Howard and his team will seize this historic opportunity.”

Copyright Photo: SM Fitzwilliams Collection. Now gone from the fleet, Boeing 737-8AS EI-CSI (msn 29924) is pictured on final approach to the Dublin base. EI-CSI carried Frankfurt and a German flag to promote its operations at nearby Hahn Airport. EI-CSI has since gone to be with Orenair as VP-BPG.

Ryanair: AG Slide Show

Ryanair launches aircraft advertising

Ryanair (Dublin) under the file “It was bound to happen”, has announced it will now sell advertising space on its 303 Boeing 737-800s. Although not a full logojet, a space by the nose and three other locations is being offered to any potential advertisers. The ultra-low fare airline issued this statement:

Ryanair, Europe’s only ultra-low cost carrier (ULCC), on July 17 offered businesses across the world the chance to advertise their brand on its fleet of 303 Boeing 737-800 aircraft and reach millions of European passengers through Europe’s largest and cheapest outdoor advertising medium. Ryanair operates over 1,600 flights per day, connecting 180 destinations in 29 countries, through over 1,600 routes and will carry more international passengers this year (81.5 million) than any other airline in the world. Companies can have their brand featured on four different locations on the Ryanair aircraft, including on the inner and outer winglets, front fuselage and rear fuselage, for a 12-month period, for a fraction of the price of a newspaper advert.

Ryanair Launches Aircraft Livery Advertising

Ryanair: AG Slide Show

Ryanair finalizes its order for 175 Boeing 737-800s

Ryanair-Boeing Signing Ceremony (Boeing)(LR)

Ryanair (Dublin) has finalized a firm order for 175 Next-Generation 737-800 airplanes with Boeing valued at $15.6 billion at list prices. The order, originally announced as a commitment in March, is Boeing’s largest ever aircraft order from a European airline.

CEO O’Leary flew into the air show on one of Ryanair’s 303 737-800s, which bore a special livery celebrating the agreement.

Ryanair, which took delivery of its first 737-800 from Boeing in 1999 and has the largest fleet of Boeing airplanes in Europe.

The airline operates over 1,600 flights per day from 57 bases on 1,600 routes across 29 countries, connecting more than 180 destinations.

Copyright Photo: Boeing. Michael O’Leary, president and CEO of Ryanair (left) joined Ray Conner, Boeing Commercial Airplanes president and CEO (right), at the Paris signing ceremony.

Video:

Ryanair: AG Slide Show

Ryanair attacks Aer Lingus’ staff compensation increases, will appeal the Competition Commission’s preliminary decision to divest its 29.4% share of Aer Lingus

Ryanair (Dublin) is appealing the UK’s Competition Commission’s preliminary decision to force the carrier to divest its 29.4 percent share of rival Aer Lingus (Dublin). The ultra low cost carrier could drag out the decision for at least two years appealing the decision according to The Independent. The Competition Commission ruled in its preliminary ruling that Ryanair exerts “material influence” over Aer Lingus due to this minority share.

The airline issued this fiery statement (as it normally does) in response:

Ryanair on May 30 criticized the UK Competition Commission’s (CC’s) provisional decision that Ryanair, through its 6½ year old minority (29.8%) shareholding in Aer Lingus, “has influence’ over Aer Lingus and that this “could reduce competition”. This unfounded claim is disproven by the European Commission’s recent (February 2013) ruling that competition between Ryanair and Aer Lingus has “intensified” since 2007.

Under EU law, the UK CC has a duty of “sincere cooperation” with the EU, and cannot contradict or reach different conclusions to the European Commission’s findings. Inexplicably, this provisional decision by the CC infringes this duty of sincere co-operation by ignoring the recent findings of the European Commission that:

“Aer Lingus and Ryanair compete on a greater number of routes compared to the 2007 Decision” and “there is significant competitive interaction between the Parties” and “evidence collected by the Commission in the market investigation has also confirmed that the competitive relationship between Ryanair and Aer Lingus has at least persisted, if not increased, since 2007”.

Should the CC maintain this untenable position in its final decision (due in July), Ryanair will appeal that decision to the UK Competition Appeals Tribunal and thereafter, if necessary, to the Court of Appeal. Until the outcome of this UK appeal, and the completion of Ryanair’s appeal against the European Commission’s February 2013 prohibition decision, the CC cannot impose any remedies, however unlawful, on Ryanair.

Ryanair’s Michael O’Leary said:

“This provisional decision by the UK CC is bizarre and manifestly wrong. The CC’s finding that Ryanair’s shareholding obstructs Aer Lingus’ ability to attract other airlines was disproved by Etihad’s purchase of a 3% stake and the evidence submitted by other large EU airlines, which confirmed that Ryanair’s shareholding was not a barrier to other airlines acquiring a stake in Aer Lingus. 

In February 2013 the European Commission found that competition between Ryanair and Aer Lingus has “intensified” since 2007. A decision by the Competition Commission that Ryanair’s 29.8% stake in Aer Lingus may lead to a lessening of competition will clearly breach the EU Treaty duty of sincere cooperation between the EU and the UK. Ryanair therefore calls on the Competition Commission to abide by this overriding legal principle and end this bogus and baseless enquiry into a 6½ year old minority shareholding between two Irish airlines.

While Ryanair is one of the UK’s largest airlines, Aer Lingus has a tiny presence in the UK, serving just 6 routes to the Republic of Ireland, a traffic base that has declined over the past 3 years and now accounts for less than 1% of all UK air traffic. This case, involving two Irish airlines where one (Aer Lingus) accounts for less than 1% of the UK’s total air traffic, is yet another enormous waste of UK taxpayer resources on a case which has little if any impact on UK consumers. 

UK taxpayer interests would be better served if the UK Competition Commission investigated (rather than ignored) BA’s recent takeovers of BMI, Iberia and Vueling, instead of wasting time pursuing this Irish case, which is of no consequence to UK consumers.”

Read the full report by The Independent: CLICK HERE

Meanwhile to re-emphasize it does not have much control over Aer Lingus, Ryanair issued this scathing statement on recent Aer Lingus employee compensation increases:

Ryanair, a 6½ year old minority shareholder in Aer Lingus on May 31 condemned the spineless Board and Management of Aer Lingus which has accepted the latest crazy Irish Labour Court recommendation that another €170m to €200m of shareholder funds be squandered to compensate Aer Lingus staff for a pension deficit which Aer Lingus has repeatedly assured shareholders is a defined contribution (‘DC’) pension scheme, and for which Aer Lingus has no further liability. If, as Aer Lingus’ IPO prospectus (and every subsequent annual report) confirmed, neither Aer Lingus nor its shareholders have any liability towards this ‘DC’ pension scheme, then why is yet another €170m to €200m being wasted on yet another pay off for Aer Lingus’ staff.

Ryanair pointed out that this is not the 1st , not the 2nd, but the 6th time (in 7 years) that Aer Lingus’ staff have blackmailed the Government and trade union controlled Board of Aer Lingus, to enrich themselves at shareholders expense at a total cost of over €600m and rising as follows:
  Aer Lingus post IPO exceptional payments to staff & unions
Year
  Payment
Reason
2006
  €132m
Pension deficit & ESOT contributions
2008
  €138m
Staff restructuring and PCI payments
2009
  €89m
Staff restructuring and PCI payments
2010
  €55m
ESOT debt & leave/redundancy tax payments
2012
  €17m
Staff restructuring payments
2013
€170m – €200m
Pension deficit & employee payments
Total
€600m – €630m
This latest staff grab of €170m – €200m confirms Ryanair’s belief that Aer Lingus cannot be trusted to protect shareholder funds from repeated raids by its unions and staff. Over the past 7 years since Aer Lingus’ flotation, more than €600m in “exceptional payments” has been unjustifiably snatched by staff, while the Board and Management repeatedly promise shareholders that each time would be the “last time”. As recently as September 2011, Aer Lingus CEO Christoph Mueller and CFO Andrew Macfarlane assured shareholders at investor meetings that they would not make “any further contributions to the pension scheme above the current DC rate of 6.375%”. Just 18 months later they both roll over and shell out another €170m to €200m and agree an increased D.C. rate of 10%, thereby increasing Aer Lingus’ cost base, with no benefit for Aer Lingus shareholders.
The recent record of this Government appointed Board of Aer Lingus in safeguarding its shareholder funds from staff grabs is awful, as the following examples demonstrate:
1.  Following its 2006 IPO, Aer Lingus made a one off (not to be repeated) contribution of €104m to eliminate its pension scheme deficit on the basis that the scheme would thereafter be a defined contribution (D.C.) scheme and Aer Lingus would have no future obligations for any deficits.
2.  In December 2010, when the ESOT (Employee Share Ownership Trust) was unable to service its bank debts, Aer Lingus wrote a cheque (on Christmas Eve) for €26m – without shareholder approval – to pay off the ESOT’s debts, again with no benefit for shareholders.
3.  Also in 2010 when the Irish Revenue rejected Aer Lingus’ “leave and rehire redundancy scheme”, which gave rise to employee tax liabilities of almost €30m, the Board and Management again rolled over and paid more than €29m in “exceptional payments” – without shareholders approval – to pay off these personal tax liabilities of Aer Lingus staff.
4.  Now in 2013, when the Aer Lingus DC pension scheme has again racked up multi million euro deficits, the unions threaten industrial action, and the spineless Board of Aer Lingus again roll over and splash out between €170m to €200m in pension contributions, pay increases, annual increments and other benefits to Aer Lingus’ staff. This brings to over €600m the exceptional payments made to Aer Lingus staff since the company floated in September 2006.
Ryanair believes that these €600m staff pay-offs over 7 years shows that the Board of Aer Lingus (which is controlled by the Irish Government and trade union bosses) cannot be trusted with shareholder funds.  They roll over every time they are threatened. Ryanair believes that Aer Lingus will, with the connivance of the Irish Government, continue to squander shareholder funds every time they are threatened by the vested interests of staff.
Ryanair will vote against this unwarranted and unjustified pay-off of up to €200m to a ‘DC’ pension scheme which Aer Lingus has confirmed it has no liability for. However since Ryanair’s minority stake gives it no influence or control over Aer Lingus it will yet again be voted down by the Government and unions who control and run Aer Lingus. Ryanair believes that this €600m to €630m of exceptional payments to Aer Lingus staff over the last 7 years since its IPO is a scandal which must be exposed and ended. Ryanair calls on the Board of Aer Lingus to stand up for shareholders and resist this industrial relations blackmail by unions and staff.
Ryanair’s Michael O’Leary said:
“How many times are the Board of Aer Lingus going to roll over when their staff and unions threaten industrial action unless they get paid off again and again. The original pension pay-off of €104m in 2006 was sold to shareholders at the IPO on the basis that Aer Lingus would have no obligation to any future pension deficits. Now despite paying over €400m to its staff in exceptional payouts over the last 6 years, yet another €170m to €200m of shareholder funds is to be squandered on paying off a deficit in a D.C. pension scheme and providing for annual increments which don’t exist in any other privately run company! We believe this is blatant mismanagement by a Board which is controlled by, and panders to, Government and unions and does nothing to protect shareholder funds.
This decision is irreconcilable with the repeated assurances given by Christoph Mueller CEO and Andrew Macfarlane CFO at previous investor meetings that Aer Lingus would not make any further one-off contributions to this D.C. pension scheme. Today’s decision (which could only take place in a company that was controlled by the Government and trade unions) is yet another example of how shareholder funds are being squandered to buy off staff again and again. Ryanair will oppose this latest “daylight robbery” of up to €200m, which brings to over €600m the cash that the staff of Aer Lingus have grabbed in exceptional payments since 2006.
Ryanair does not believe that this latest exceptional payout will be the last. The Aer Lingus unions have repeatedly shown that whenever they threaten, the Board and Management will roll over. This will continue while Aer Lingus remains controlled by a Board of Directors which was appointed by and is controlled by the Irish Government and ICTU boss David Beggs and which has presided over wholesale destruction of Aer Lingus’ share price, a six year record of cumulative losses, 3 years of declining traffic and now over €600m in exceptional pay-offs to Aer Lingus’ 3,000 staff or over €200,000 a head. As a public company, Aer Lingus should be run for the benefit of its shareholders and not to repeatedly enrich its 3,000 staff.”

Top Copyright Photo: SM Fitzwilliams Collection/AirlinersGallery.com. Ryanair’s Boeing 737-8AS WL EI-EVF (msn 40291) with “Modlin Jest OK! – Modlin is OK!” sub-titles taxies at the Dublin base.

Ryanair: AG Slide Show

Aer Lingus: AG Slide Show

Bottom Copyright Photo: SM Fitzwilliams Collection/AirlinersGallery.com. Aer Lingus’ Airbus A319-111 EI-EPT (msn 3054) lands at Dublin.

Ryanair’s 2012 profit rises by 13% to a record $731.3 million

Ryanair (Dublin) has reported on its financial results for 2012. The company issued this statement:

Ryanair, Europe’s only ultra-low cost carrier (ULCC) today (May 20) announced (record) annual profits of €569 million ($731.3 million), up 13% on last year despite higher oil costs. Revenues rose 13% to €4.88 billion as traffic grew 5% to 79.3 million passengers. Unit costs rose 8% mainly due to an 18% (€292 million) increase in fuel. Excluding fuel unit costs rose by 3%, while average fares improved by 6%.

Full Year End (IFRS)

Mar 31, 2012

Mar 31, 2013

% Change

Passengers(m)           75.8            79.3          + 5%
Revenue(m)        €4,325        €4,884         +13%
Profit after Tax(m) Note 1           €503           €569         +13%
Basic EPS(euro cent)          34.10          39.45         +16%

Announcing these profits Ryanair’s, Michael O’Leary, said:

The highlights of the past financial year include:-

·         Profits grew by 13% to €569m.

·         Traffic grew 5% to 79.3m (despite grounding up to 80 winter aircraft).

·         7 new bases – Chania (Greece), Eindhoven (Netherlands), Fez (Morocco), Krakow (Poland), Maastricht (Netherlands), Marrakech (Morocco) & Zadar (Croatia).

·         217 new routes (y/e total over 1,600 routes).

·         15 new aircraft delivered (y/e fleet 305).

·         2nd special div. of €492m and €68m share buyback completed.

·         175 new aircraft order, delivery 2014 to 2018 (sub. to June 18 EGM approval).

Delivering a 13% increase in profits and 5% traffic growth despite high oil prices during a European recession is testimony to the strength of Ryanair’s ultra-low cost model. Fuel costs rose by over €290m, and now represent 45% of total costs.  Excluding fuel, unit costs were up 3% due to excessive and unjustified increases in Italian ATC, Eurocontrol and Spanish airport fees. Ancillary revenues outpaced traffic growth, rising 20% to €1,064m or 22% of total revenue.

Growth – New Routes and Bases

This summer Ryanair opened 7 new bases, and more than 200 new routes as we continue our strategy of growing Europe’s largest passenger airline. However with 9 (net) additional aircraft and longer sectors, traffic growth this summer will be very modest at approx. 2%. By grounding fewer aircraft next winter we expect to deliver slightly faster H2 monthly growth which should result in overall traffic growth for the full year rising by more than 2m to 81.5m passengers.

Forward bookings on our new routes and bases this summer are ahead of expectations (albeit at modest yields) as competitor airlines continue to restructure and cut short-haul capacity. We expect growth opportunities for Ryanair to expand and improve for the foreseeable future.

Our new route teams continue to handle more growth opportunities than our current fleet expansion allows. Significant opportunities are opening up in Germany, Scandinavia and central Europe in particular, where Air Berlin, SAS and LOT continue to restructure. We are in active discussions with the new owners of Stansted Airport and the new management at Dublin Airport and while no agreements have yet been reached, if a competitive cost base emerges, then we could restart growth at one or other airports as early as September 2013.

We have also made offers to the Spanish airport monopoly AENA to reverse a significant proportion of its traffic declines over the past two years. In a country where youth unemployment runs at 50%, their policy of increasing airport fees, while traffic declined from over 220m to under 180m over the past six years is plainly ill-judged. As ever, Ryanair remains willing to exploit growth opportunities wherever airports provide attractive incentives to do so.
 
Market Share Gains

Ryanair continues to expand, making meaningful share gains in many of Europe’s largest markets. In addition to being the No. 1 passenger airline in Ireland, and Spain, we have in the last 12 months overtaken Alitalia and LOT to become Italy’s and Poland’s No. 1 airline, respectively. Ryanair believes that its unique low cost advantage will enable the airline to achieve a 20% share of the European short-haul market over the next 5 years, particularly given that many of Europe’s high fare incumbents are restructuring and cutting capacity.

New 175 Aircraft Order

Ryanair’s successful growth, allied to deep short-haul restructuring among many high fare competitors, gives us confidence that we can grow from 80m p.a. to over 100m passengers p.a. over the next 5 years. Our recent order for 175 firm B 737-800 aircraft represents an enormous opportunity for shareholders as Ryanair returns to higher rates (5% p.a.) of traffic growth. We are pleased to have reached acceptable  pricing with Boeing, and the controlled delivery programme from Autumn 2014 to end of 2018 will provide the opportunity to expand Ryanair’s fleet to over 400 aircraft and our traffic to over 100m p.a. 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.

Aer Lingus

We were disappointed that the European Commission in February 2013 decided to prohibit Ryanair’s third offer for Aer Lingus. It is bizarre that the EU can wave through BA’s offer for British Midland in Phase 1 with few remedies, yet months later reject Ryanair’s offer for Aer Lingus which was accompanied by a revolutionary remedies package delivering two upfront buyers to open competing bases in Dublin and Cork airports. We have no doubt that this was yet another politically motivated decision by Europe’s competition authority and it is inexplicable in the context of its stated policy of promoting European airline consolidation.

Having our third offer for Aer Lingus prohibited by the EU Commission on the grounds that “competition between Ryanair and Aer Lingus has intensified since 2007”, our shareholding is now the subject of an even more bizarre regulatory inquiry in the UK where the Competition Commission are reviewing our 6½ year old minority stake in Aer Lingus on the basis that it may have “lessened competition” between Ryanair and Aer Lingus. Given that the UK Competition Commission has a legal duty of sincere co-operation with the EU, we believe they cannot make a contrary finding, and so this spurious and time wasting inquiry into a 6½ year old minority stake between two Irish airlines, one of whom (Aer Lingus) has a tiny presence in the UK market should now be abandoned in the light of the EU Commission’s finding that competition between Ryanair and Aer Lingus has intensified.
 
Fuel Hedging

In recent years high oil prices and competitor fuel surcharges have made Ryanair’s fares even more attractive to hard pressed European consumers. The combination of high oil prices, increasing competitor losses, together with a shortage of financing for weaker credits, will lead to continued EU consolidation and closures. Ryanair is 90% hedged for FY’14 at $980 per tonne (approx. $98 p.bl) and we have now extended our hedges into FY’15 with 25% of H1 hedged at $930 per tonne (approx. $93 p.bl). We hope to continue to make meaningful reductions in our oil costs into FY’15.

Balance Sheet

Ryanair’s balance sheet remains one of the strongest in the industry. Our aircraft which have been purchased at substantially discounted prices, represents a significant long term benefit for our shareholders. We have gross cash over €3.5bn and year-end net cash of €61m, despite having returned almost €500m to shareholders in November (€1.5bn over the past 5 years) via a second special dividend. We have also taken advantage of current low interest rates to secure almost 70% of our fleet financing all in at under 3% and we have completed our Capex hedging programme to the end of 2014 at Euro/Dollar exchange rate of 1.32.

Outlook

We expect traffic in FY.14 to grow by 3% to 81.5m. Growth will be slower in H1 at approx. 2%, but rise to approx. 5% in H2 as we ground fewer winter aircraft (up to 60) compared to prior years. Unit costs will increase primarily due to rising oil prices, a 3% growth in sector length, and unjustified higher Eurocontrol and Spanish airport charges. Due to lower yields and higher fuel costs Q1 Net Profit will be lower than last year due to the timing of Easter (which boosted Q4 revenues) and its presence in the prior year Q1 comparable. With almost zero yield visibility into H2 and the EU wide recession, we expect that there will continue to be downward pressure on yields which will dampen full year profit growth. We expect modest yield and traffic growth for the full year to be partly offset by higher oil and Eurocontrol costs resulting in another year of profit growth in FY’14 which – subject to winter yield outturns – should increase to a range of between €570m to €600m”.

Copyright Photo: SM Fitzwilliams Collection. In November of 2006 Ryanair added these biting “bye bye Latehansa” markings to this Boeing 737-8AS EI-DLM (msn 33594) pictured landing at the Dublin base. The aircraft has since gone on to Nok Air as HS-DBM.

Ryanair: AG Slide Show

Ryanair commits for 175 new Boeing 737-800s

Ryanair (Dublin) has committed to purchase 175 new Boeing 737-800s pending the completion of the final contract.

Boeing issued this statement:

Boeing (Chicago) is delighted that Ryanair has announced a commitment to order 175 Next-Generation 737-800s for the airline’s fleet expansion. When finalized, the agreement will be worth $15.6 billion at list prices and will be posted to the Boeing Orders & Deliveries website as a firm order.

“This agreement is an amazing testament to the value that the Next-Generation 737 brings to Ryanair,” said Boeing Commercial Airplanes President & CEO Ray Conner. “We are pleased that the Next-Generation 737, as the most efficient, most reliable large single-aisle airplane flying today, has been and will continue to be the cornerstone of the Ryanair fleet. Our partnership with this great European low-cost carrier is of the utmost importance to everyone at The Boeing Company and I could not be more proud to see it extended for years to come.”

Ryanair CEO Michael O’Leary and Conner will hold a joint press conference today to discuss the announcement at the Waldorf Astoria Hotel (Starlight Roof), 301 Park Avenue, New York, at 10:15 am ET.

Meanwhile Ryanair issued this statement:

Ryanair, Europe’s only ultra-low-cost carrier (ULCC), today (March 19) signed an agreement with the Boeing Company to purchase 175 new Next Generation 737-800 airplanes.  When finalized, the deal will be worth nearly $15.6 billion at current list prices, and will allow Ryanair to grow its airline to more than 400 airplanes, serving more than 100 million passengers per year across Europe by the end of the delivery stream in 2018.

The agreement was signed by Ryanair CEO Michael O’Leary and Boeing Commercial Airplanes President CEO Ray Conner in New York (March 19). Upon approval by Ryanair’s shareholders, the purchase will become Boeing’s largest deal to date in 2013 and will be the largest ever aircraft order from a European airline. It will sustain thousands of skilled manufacturing jobs in Boeing and its supplier companies and will represent the largest ever capital investment by an Irish company in U.S. manufacturing and U.S. jobs.

These Boeing airplanes will create more than 3,000 new jobs for pilots, cabin crew and engineers at Ryanair’s growing number of aircraft bases across Europe. Approximately 75 of these new aircraft will replace some of Ryanair’s existing fleet of 305 Boeing 737s, but the remainder will drive new growth of  Ryanair’s fleet of young, highly efficient airplanes. These airplanes will allow Ryanair to grow its low-cost airline service by about 5 percent per annum over the next several years, taking Ryanair’s traffic to over 100 million passengers by March 2019.

As Ryanair continues to plan its future as Europe’s low-cost airline leader, it continues to evaluate the benefits of Boeing’s 737 MAX aircraft which enters service in 2017.

Copyright Photo: SM Fitzwilliams Collection. Boeing 737-8AS WL EI-CSB (msn 29917) turns on to the runway at the Dublin base. This airframe has since gone on to VARIG (2nd) as PR-VBB.

Ryanair: AG Slide Show

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