Ryanair 2004 Annual Report Download - page 6

New Routes and Bases
Of the 150 routes that Ryanair operates today, 73 were still in
their first 12 months of operation at the year end. In recent
months we have opened new bases at Girona Barcelona and
Rome Ciampino. We are continuing to add frequency to our
existing schedules as well as adding new routes to our existing
bases. We expect passenger growth to slow down in the
coming year to a more “normal” 20% after a number of years
of hectic but strategically very important growth. We believe
that this more modest growth will allow us to continue to
improve customer service, whilst at the same time resuming
our record of profitable growth for our shareholders.
O ver the past yea r, des p i te enormous growth, diffi cu l t
markets, and a downturn in profit, we have increased the basic
pay of our people by 3%, an increase that is significantly
greater than most, if not all, of our competitors. Average pay
in Ryanair co n t i n u es to be amongst the highest of any
European scheduled airline, and our people continue to enjoy
the best package of salary, terms and conditions, and share
options.
Regulatory Affairs
If there was a negative trend over the past year, it was the
increasing tendency of regulators to sacrifice the interests of
consumers and competition in favour of protecting the vested
interests of high cost national airlines and airports. A local
tribunal in France found in favour of an Air France complaint
against Ryanair’s low fares at Strasbourg Airport. As a result
we moved these flights to the nearby Karlsruhe Baden Airport
with no loss of traffic.
However Strasbourg airport has seen its traffic on the London
route collapse from just under 20,000 passengers a month to
just over 3,000, as passengers are de terred by Air France’s
high fare monopoly on the route. The only losers in this case
have been ordinary French consumers and visitors who cannot
afford to pay Air France’s high fares and therefore no longer
use Strasbourg Airport.
In February the European Commission held that Ryanair’s low
cost base at Brussels Charleroi constituted unlawful state aid
primarily on the basis that no privately owned airport would
enter into asimilarlong term low cost arrangement. This anti-
competitive decision is contrary to the reality of the current
European market which is characterised by many private and
publicly owned airports offering long term discounts to high
growth airlines such as Ryanair (among others) who are
capable of transforming an empty airport such as Charleroi
into a vibrant, high growth, profitable international airport.
The Commission’s findings in the Charleroi case ignore its own
private market investorprinciple and we remain confident that
this anti-consumer decision will be overturned on appeal to
the Eu ro p e an Co u rts. In the meantime Ryanair has
renegotiated its contract with Charleroi in order to comply
with the Commission’s decision, but without altering the low
cost base.
Ryanair’s growth in Europe has frequently been subjected to
these regulatory attacks from our competitors. We have over
the past 15 yea r s continuously ove rturned these anti-
competitive interventions in the courts upon appeal. US low
fare carriers, like Ryanair, had to overcome many regulatory
battles across the US in the 80’s and 90’s. Ryanair will
continue to suffer these anti-competitive actions for a number
of years simply because this is the only way that the high cost,
high fare incumbents can seek to block competition, limit
c h o i ce, and prevent a better deal for E U co n s u m e rs .
Eve n tu a l l y re g u l a to rs will rea l i se that protecting the
incumbents is anti-competitive and futile because the future
of air travel lies in more choice, more competition and more
low fare services for consumers, not less.
(Continued)
Chief Executive’s Report
6
A N N U A L R E P O RT & F I N A N C I A L S T A T E M E N T S 2 0 0 4
00 01 02 03 04
36
38
40
42
44
48
50
46
41.7
50.6
53.3
54.0
38.4
‘000’s
AVERAGE PAY