Fuel prices soar: Ryanair says flight costs will rise
The Irish budget airline has already announced plans to cut its winter capacity as a result of higher fuel costs.Ryanair reported pre-tax profits of 138m for the three months to June, up one per cent up from a year ago, and said it carried three million more passengers than the same period in 2010.
Ryanair has reported pre-tax profits of 138m for the three months to JuneMr O'Leary says the rise of 49 per cent in fuel cost has to be passed on to consumers. But he adds that many fares remain lower than they were in 2007. The surge in fuel prices cost the airline 123.6 million more than planned, pushing profit below market expectations.
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The airline hopes an optional 10 euro charge on some routes for extra leg room will boost income from ancillaries in the future, which accounted for 21 per cent of income in the first quarter.
Sales of reserved seats on flights could be extended across the airlines network this winter if an initial trial goes well.
Ryanair boss Michael O'Leary says it is inevitable that higher fuel costs be passed on to consumersThe Ryanair boss said the boosted traffic figures for the quarter had been affected by the 'unnecessary airspace closures' in 2010, due to the ash cloud which followed the volcano in Iceland.Mr O'Leary put the l! oss of p assengers during that period at almost 1.5 million.
The airlines chief financial officer Howard Millar said: We are going to have a very strong Q2 and we are confident that despite high oil prices we can deliver net profit of 400 million euros.
'Consumers are clearly spending money this summer but we will have to see what the winter brings.
Last week, rival budget airline Easyjet raised its profit forecast for the year, saying its new strategy, which includes appealing to more business customers, was progressing well.
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