Posted on 06/03/2003 3:12:20 AM PDT by tdadams
Budget airline Ryanair today pledged to "destroy the airline business as we know it" as it reported a surge in profits for last year.
The low-cost carrier made an after-tax profit of 239.4m euros (£172m) in 2002-03, for the year ending March 2003. This was a 59% rise on the 2001-02 figure of 150.4m euros (around £108m).
As the company unveiled strong profits, Michael O'Leary, its combative chief executive, said that he intended to keep the pressure on competitors by aggressive fare-cutting.
Mr O'Leary added that Ryanair expected to become Europe's biggest internationally scheduled carrier, beating Lufthansa and British Airways, within three years.
"Our aim is not to kill anyone, but it is to grow aggressively. We're going to destroy the airline business as we know it," he told Reuters.
Mr O'Leary said that Ryanair, which started in 1985, would carry about 24 million passengers and challenge Air France for the title of third-biggest passenger carrier in Europe.
"In two years' time we will be the world's largest international scheduled airline," he predicted. He said he was looking forward to the moment when he could adopt BA's slogan describing itself as "the world's favourite airline".
"The world's favourite airline is 'the paddys'," he declared. "I've got no shortage of humility."
But Mr O'Leary admitted that profit margins would fall in the coming year because of the rise of the euro against the pound, and because of lower fares. Margins last year came to 28%.
"We won't do that again," he said, referring to the 28% figure. "We reckon it (the net margin) will come down to somewhere in the low twenties again over the next 12 months, mainly because we will drive the fares down. We're driving the fares down all over the place at the moment," he added.
Passenger traffic in 2002-03 grew by 42% to 15.7 million. The airline's planes were 84% full, compared with a figure of 81% in 2001-02. Ryanair managed strong profits, despite a time of deep turmoil in the airline industry.
The market has suffered from high fuel prices, the war in Iraq, the impact of the Sars virus and the continuing effect of weak global growth. These factors have plunged several of the world's leading carriers, including American Airlines and United Airlines, into crisis. British Airways is only beginning to find its footing after slashing its workforce and cutting costs.
Ryanair, however, has increased its profits for 15 successive years.
The airline says its continued profitability "stems from the fact that we have the lowest costs and the lowest air fares, which no other European airline can match".
To coincide with the announcement of the financial results, Ryanair today released 1 million low fare seats at £19.99 and £29.99 one way for travel during June, July and August. The company will fly 125 routes this summer thanks to its acquisition of fellow no-frills carrier Buzz.
They have a very smart strategy of luring customers with ridiculously cheap airfares, like their promotion last year offering £5 flights between London and anywhere they fly in Europe.
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