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Ryanair declared itself the undisputed champion of the European airline industry today, saying it will deliver profits of up to £260 million this year while the likes of British Airways will lose hundreds of millions of pounds.
"The business-class strategy of these airlines like BA, Lufthansa and Air France is dead," said Ryanair chief executive Michael O'Leary.
"Passengers are not flying business class anymore and they certainly don't want to have to put up with airports like Heathrow. Their business model is over.
"These airlines, which have relied for so long on shovelling rich people through expensive hub airports, are finished."
Ryanair with its model of flying passengers on a budget - average fares this year are expected to come in lower than £30 - albeit to secondary, out-of-the-way European airports has seen the Irish airline become Europe's largest carrier by market value and number of passengers flown.
With 58.5 million passengers in the past 12 months, it flew 2.5 million more passengers than Lufthansa, the previous European market leader, and 25 million more than BA.
With a market capitalisation of €5.3 billion (£4.6 billion), Ryanair is larger than the German flag carrier and easily more than twice the size of BA.
Ten days ago BA reported annual losses of £401 million with chief executive Willie Walsh admitting he had misread the recession by chasing high-fare-paying passengers rather than volumes of travellers in economy.
Walsh has now further admitted in a message to staff that BA is in a "fight for survival".
Ryanair today reported a better-than-forecast €105 million net profit for the year to the end of March.
But investors were further buoyed by O'Leary's claims that profits in the current financial year could nearly treble, setting a target of between €200 million and €300 million.
O'Leary believes the battle to keep people flying will see average fares fall by between 15% and 20% to €32 a passenger.
But that will be offset by continuing large growth of 15% as it expects to carry 67 million passengers this year.
The real driver for Ryanair's profit growth, however, is the cost of fuel.
O'Leary spectacularly misread the oil price at the end of 2008 when he locked Ryanair into paying the equivalent of $125 a barrel for kerosene just as the price of oil was collapsing to below $40 a barrel.
The disastrous hedging strategy is reckoned to have cost Ryanair as much as €150 million in lost profits.
With the oil price currently heading to $70 a barrel, much of Ryanair's fuel needs this year are locked in at $62 a barrel, giving a massive saving this financial year of around €450 million.
Ryanair's accounts today show it has written down the value of its 28% holding in Aer Lingus by €222 million after failing to take over its Irish rival.
Reader views (12)
i have flown on many airlines around the world including jumbo jets down to the little budget airlines ,and guess what .PEOPLE ALWAYS MOAN REGARDLESS. ryanair ok i thought having to start paying for to use the loo was way over the top ,but otherwise who cares at the end of the day one gets exactly what one pays for .i dont have grands so i have no qualms of travelling budget ,most important aspect for me is i get to my destination safely.and therese been hardly any problems in that department .so lay off mr o leary and if your all not happy stay at home simple really .
- Mary Creighton, liverpool merseyside
I now only use them for short trips when I do not need to put luggage in the hold. Their special offers are good value, if you can find one that suits what you want to do.
Their standard fares, plus unavoidable extras for long trips are NOT cheap. I have just been looking at flights to Austria in August and found that both easyJet and Aer Lingus were cheaper for flights to and from Vienna. Ryanair's Vienna airport is actually Bratislava in Slovakia. I even looked at Ryanair's flights to smaller airports such as Graz, Linz and Salzburg and they were no cheaper.
So don't believe the hype. If you are not booking a Ryanair special offer, they are not as cheap as they would like you to believe. People falling for this are the ones that are responsible for his profit predictions.
- Andrew, London W1
Have travelled with this carrier with arm rests falling off seats that your bum won't fit, begs a question of safety. I'll take BA anyday.
- Bill, Belfast
They are a total con. The ticket for a flight is cheap but the damn taxes and hidden costs are an outrage!! I recently traveled to Italy with them and coming back they said my bag weighed more and charged me £150!!! I had done no shopping and there were no new items in my bag!!!
- Serox, London
So what. I would not travel his airline even for free ( including taxes and airport landing rights)
- Peter Glazier, Sao Paulo, Brazil
Eindhoven is NOT a secondary, out-of-the-way European airport, I´ll have you know. It´s the home of PSV and the Philips empire and quite a thriving, vibrant metropolis. Good choice, Mr. O'Leary.
- Graham Rodhouse, Helmond, Netherlands
You get what you pay for gentlemen. The longest direct Ryanair flight is only 3 and half hours I believe (Luton to Marrakech) which I used last December.
I can easily go without a cooked meal for that long or without TV for that matter though it would be nice to have both.
But to fly to Morocco and back for a total of £41 as I did last year.
Can't fault them...keep on trucking men and women of RyanAir
- Jason Stone, Stratford, Newham
Mark & Martin. Ditto your comments. They are such a revolting company ran by that gobby mouthed "wide boy" Michael O'Leary.
- Mel Petersson, Tenerife. Canary Islands.
Now just what airline and seat class does Mr O'Leary fly when he travels long haul.? Ryanair makes it's cash on outragious extras such as overweight baggage charges and in flight dreadful beverages and food. Add the near suicide check in environment and I will fly with any other airline if it's where I want to go - Club class any time if you work hard enough and can afford it.
- Jonathan, Totteridge. England
I booked a ticket to fly with RyanAir to New York. Imagine my suprise when we landed at Dublin and were told it's only a short swim..
- Pablo, Kent
With you there Mark. I loath Ryanair but I do use them from time to time for short journeys. Hypocrite-yes but flying to Belfast for a few pennies can't be moaned at.
- Martin, London
God, I can't stand Ryanair.... I use them but I can't stand them.
- Mark, St Albans
