Ryanair Predicts Better Forecast After Fall in Fuel Costs

The well known UK budget airline Ryanair has just recently raised its annual profit predictions. This happened after a sharp fall in fuel costs helped it to narrow its quarterly losses. Ryanair went on to report a shortfall of 11 million euros in the three months to December 31^st, from 102 million euros in the same period a year earlier.

Most of this is due to the fact that fuel costs were down 37 percent in the quarter. The average fare cost was down only 12 percent. The carrier said that it has benefited in the recession as its competitors continue to struggle. The airline aims to increase passenger numbers by 10 percent to 73 million in 2011 as it moves into routes vacated by its rivals.

Ryanair, which launched a series of low promotional fares in the quarter, said that passenger numbers rose by 14 percent to an amazing 16 million. The airline’s big boss man, Michael O’Leary, said that fears had dropped in the period due to the recession, price promotion, and currency fluctuations between the pound and the euro.

Ryanair also noted that their ancillary revenues, which are the charges for extra services offered by low budget and full service airlines, grew more slowly than passenger numbers at only 6 percent as customers avoided excess baggage costs. The drop was driven by deep cuts in loss making winter capacity at higher costing airports like Dublin and Stansted. Ryanair did dip into the red by 169.2 million euros in the year to March last year amid huge rises in the cost of fuel.