This year, Ryanair has celebrated 30 years since it started operating. The low cost airline company has also recently reported positive financial results. In fact the company’s pre-tax profits increase by 24% over the quarter between April and June. Besides, there has also been a substantial increase in the number of passengers. Reports show that this grew to 28m customers, which means that there has been a rise of 16%. This was also helped thanks to the lower fuel prices, however all in all the company is doing really well.
As Michael O’Leary, the company’s boss stated, the results are very favourable. He believes that these great results were obtained mainly because the company manages to retain low fares but still offer a positive customer experience. This is the secret behind Ryanair’s success, which is referred to as the ‘Always Getting Better’ programme. This plan has in fact seen customers benefit from the introduction of a free second carry-on bag along with discounts on the checked luggage. This system has made the company earn less per passenger. In fact the revenues per passenger have slipped by 4.1%. However, despite that, the company is still doing well because the number of customers has increased and made up for this.
Ryanair has also just announced that it is going to open its sixth German base in a few months, probably in September. The base is going to be at Berlin Schonefeld, where the company already has a 5% market share. This percentage is set to increase over the next five years.
Ryanair has also introduced the campaign by the name ‘Keep Greece Flying’. Following Greece’s financial problems, Ryanair tried to give a helping hand with this campaign where Greek domestic routes were priced at just €4.99 one-way. It also cut fares on international routes to and from Greece. These were reduced by 30%. Ryanair had 12 Athens routes over the past year. One of these was a direct route from Brussels, which was widely used by politicians who needed to travel to Greece for meetings and deals regarding the country’s future in the Eurozone.
Another noteworthy piece of news about this airline company is that this month it has also accepted a bid for its 29.8% stake in Aer Lingus to IAG, the British Airways owner. This is for €1.3bn. IAG has offered Ryanair a cash payment of €2.50 for each Aer Lingus share, along with a €0.05 cash dividend per share. However, when taking into account the price Ryanair paid per share when it had first this acquisition back in 2006, this is not going to make such an effect on its current profits. This is because the Aer Lingus share price has only risen by some 2.1% since then. On the other hand Ryanair’s share price over the same period rose by 195.8%.
