As Profits Decline Ryanair Amaze Fliers By keeping Their Prices Static

Ryanair flying to Portugal

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Ryanair is a low cost airline that loves to be in the headlines. Therefore, when the company announced that the profits had slipped by nearly a third, throughout the first quarter of 2012, fliers were worried. Experts predicted that this decline was due to the world wide recession, causing people to remain at home.

Increased fuel charges have also not helped the low cost airline, which has been absorbing the extra costs. This news would have typically encouraged Ryanair to increase their prices, however, in a shock result; they have decided to keep the prices static. The director of the company did make a statement, claiming that he would love to have increased the prices.

Ryanair need to cover the money that they are losing through the increased fuel prices; however, they understand that this is not the right time to increase the costs for their passengers. Therefore, the airline will need to suppress the prices for the remaining part of the year. This has won them some fans, and people are appreciating the price freeze.

However, before the passengers get too excited, the cost of the fares will rise in line with the economic environment. There will be a 3% increase over the next few months of 2012; however, this is less than the first quarter that rose by 4%. Ryanair defend their increase by stating that last year the fares rose by 16%, which was a huge increase for seat prices.

The company released their pre-tax profits for the period between January and March, and announced that they were only €112.5m. This was a decline of 28%, which was shocking as they flew extra 1.2m passengers. There were other increases such as on board food, and travel insurance, which increased by 15% over the year.

The largest increase that the airline received was the fuel bill, which rose by a staggering 27%, which is why they were making a loss. However, Ryanair continues to go from strength to strength, and attempted to make a hostile takeover of Aer Lingus. However, this company claimed that the €549m offer was not acceptable or credible.

As part of the consortia that Ryanair own, they continue to want to buy more of a stake at Stansted airport. This airport is now valued at around 1 billion pounds, however, it continues to fight the decision to sell and wants to remain with BAA. However, Ryanair want to take a 25% stake, and are hoping that Stansted continue to lose their appeals.

Ryanair believes that they can increase their flights through Stansted, and help the airport to grow and develop further. Since 2007, the passenger numbers have been steadily declining, and this is no longer seen as an attractive airport. Whether you love or hate Ryanair, their low cost airline is effective, and people continue to use them for their flights.


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Published in: Portuguese Life / Travel