Ryanair Announces £94 Million Profits For First Quarter 2007
They may advertise themselves as a no frills airline, but there seems to be big money in the no frills game. Budget airline Ryanair has just announced profits of £94 million for the first three months of 2007, a 20% increase on the same period last year. Surprisingly the company have also offered a detailed insight into just how they make their money - you may be surprised!
It now appears that one pound in every six which the company receives actually comes from “non fare” purchases. Apart from the obvious profits from on board drinks and food, the company have also arranged potentially lucrative deals with hotel and vehicle hire companies, in which Ryanair receive a slice of any income from their passengers. A move that effectively subsidises ticket prices, allowing Ryanair to be more competitive than many other budget airlines.
The company also issued a rather revealing list of charges which have helped to increase profits, which include :-
· £5 for each bag stored in the hold.
· £5.50 per kilo of excess baggage.
· £20.50 to change flights.
· £15.50 for travelling with bulky sports gear or musical instruments.
While these are just a few of the fees incurred by many customers, Ryanair are still one of the cheapest airlines around, a fact endorsed by an 18% increase in passenger numbers compared to the same period last year. The company have been very vocal in their opposition to government tax increase, and moves to curb the power of the budget airlines, although the UK government seem determined to level the playing field for more traditional airlines.
In a separate move it has also been announced fare regulations are to be lifted on international flights. It was thought that flights between the US and UK would be exempt for the moment, but many expect the restrictions to be lifted very soon - yet more competition appears to be on the way for the traditional airlines!