Ryanair has released its latest figures and it is all good news as the budget airline continues to grow across Europe.
The brand is recasting itself as a 'friendly company' but in truth its recent success owes more to the company’s savvy business offerings and the poor performance of the European economy.
How do the numbers look?
They look very good. The company has boosted its forecast profits by a massive 32 percent. This means that after tax the company will make somewhere between €750 and €770 million – this is up from an expected €620 to €650 million.
Ryanair has had a surge in winter bookings, selling two million more tickets than it had expected to over the traditionally quite months.
The Irish airline's share price is up six percent this morning.
Europe’s difficulty is Ryanair’s opportunity
As Europe struggles more travellers are flying with Ryanair. The airline’s total number of fares is set to grow by nine percent, swelling to 89 million passengers.
Speaking to Bloomberg the airline’s chief executive Michael O’Leary said: “I always have concerns about the European economy, but customers are getting more and more price sensitive and are switching to Ryanair even more."
While the European economy stagnates and money is tight, it makes sense that both individual travellers and businesses will be extra frugal and try to save on expenses like airfares.
Ryanair is still undercutting its rivals across the continent.
Two higher cost airlines, Air France and Lufthansa have lowered their profit forecasts in the last few days, citing the poor economy, an increase in competition, and industrial action as contributing factors to their poor returns.
Business class
Ryanair freshened up its product offerings by introducing its own stripped back version of business class. This has seen their fare per passenger rise by five percent. The average amount spent on a Ryanair flight is now €54.
Normal extras like in-flight meals and a curtain between business class and economy flyers are not found on board Ryanair’s aircrafts. Staying true to their no-frills model, ‘Business Plus’ flyers get more practical perks, like priority boarding, fast-track security and flexible tickets. Business travellers across the continent are giving up luxuries to save on costs.
What else has been going on?
Ryanair has had a PR makeover, marketing itself as a ‘caring’ and ‘family-oriented’ airline. It has revamped its website to make it more user-friendly.
The company has also benefited from cheap oil as lower energy prices saved them two percent this year.
Where to from here?
Now that it has the bit between its teeth Ryanair is planning to slash prices in the New Year.
It will cut fares by up to 10 percent in the spring to draw in even more passengers and consolidate its position as Europe’s largest low-cost airline.
