Business Irish

Friday 21 October 2016

Ryanair soars with 100m passengers as it targets growth potential

Published 08/01/2016 | 02:30

All things being equal, it should take Ryanair about another five to seven years to become the biggest global airline by passenger numbers.

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Yesterday, the carrier headed by Michael O'Leary said that it had become the first airline to ever carry more than 100 million international passengers in a year.

It said that it carried 7.5 million passengers in December, which was 25pc more than it did in December 2014. That brought the tally for 2015 to 101.4 million passengers.

It still has some way to go to become the world's biggest carrier by passenger numbers, but it's on track to eventually do so.

In 2014, US airlines Delta and Southwest each clocked up over 129 million passengers.

Ryanair's own financial year ends in March, and it has previously predicted that during that 12-month period it will carry about 105 million passengers. It also expects to make a profit in the current financial year of about €1.2bn.

By 2019, Ryanair has predicted that it will be carrying 120 million passengers, and hauling 180 million by 2024.

It's an astounding pace of expansion by any measure.

The growth in passengers numbers has been a function of adding more aircraft to its fleet and to its self-styled 'Always Getting Better' campaign, which has been paying huge dividends with its efforts to attract more business travellers and families.

Over the past couple of years, Ryanair has also stripped out or slashed many of the charges that its customers used to moan most about. Mr O'Leary had for years told his passengers that if they didn't like the charges that they could get lost.

But the Ryanair volte face has seen it curry favour with a whole coterie of flyers who would previously have sworn blind that they would never fathom going anywhere with the carrier. It's also targeting more and more primary airports to spur growth.

And all the while, it's benefiting from lower fuel costs and more efficient aircraft, which helps it to continually push down fares.

Last September, Mr O'Leary told a gathering of Irish business directors that he will use falling fuel costs to keep chipping away at ticket costs.

"The average fare in Ryanair last year was €45," he said at the time. "We a plan in the next five years to take that average fare down to about €25. We may not get there, but at least we're determined to keep driving down the cost of travelling to make it more affordable."

And although Ryanair has been taking delivery of more aircraft from Boeing, it has also been able to actively manage its yields, or the average price per ticket, and keep its planes almost full. The load factor - or percentage of seats filled - in December was 91pc, compared to 88pc in December 2014 when it had more aircraft grounded for the winter.

Ryanair is also expanding its footprint, having launched flights to Israel and confirming yesterday that it will return to Belfast in March, with a base at Belfast International Airport. It also unveiled extra seasonal flights from Dublin to Gatwick.

The airline will release third-quarter results on February 1, when any impact from lower fares it had to resort to following the terror attacks in Paris and Belgium will filter through.

"The one area expected to be slightly weaker than previously forecast is yield," said analyst Mark Simpson at Goodbody Stockbrokers. Regardless, the airline has previously proven its ability to weather geopolitical tremors.

Irish Independent

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