Ryanair 2006 Annual Report Download - page 4

During this year we also achieved a number of significant
milestones:
•We increased our passengers carried by 26% to 35m
passengers.
•Our cash balances at the year end increased by 367m
to 1.97bn
•We retired the remainder of our Boeing 737-200 fleet
which reduced the average age of Ryanair’s fleet to just
2.4 years. We now have the youngest fleet of any major
airline in Europe.
•We opened 5 new bases at East Midlands, Pisa, Liverpool,
Cork and Shannon and launched 75 new routes during
the year bringing our total routes operated to 262 and
extended our operations to 3 new countries, Poland,
Slovakia and Hungary.
•We took delivery of 25 new Boeing 737-800’s bringing
the total fleet to 103 aircraft.
Oil prices continue to be high and volatile. Fuel costs now
represent 35% of our total operating costs compared to
27% last year. Excluding fuel, unit costs fell by 7%
(including fuel they rose by 5%) as we continue to make
further significant reductions in our cost base. Since 2000
our unit operating costs excluding fuel have fallen by 40%,
an enormous achievement during a period of rapid passenger
growth. We continue to aggressively focus on reducing our
cost base and anticipate further unit cost reductions over
the coming year.
The airline’s highest priority remains the safety of our
passengers, crew and aircraft, and the Board is focused on
extending our 21 year unblemished safety record. Customer
service performance continues to improve thanks to the
efforts of our staff as we maintained our number 1 position in
Europe with the best on time performance, fewest
cancellations, and the lowest level of lost bags. This
achievement reflects the enormous commitment of the
people of Ryanair and their dedication to serving our
passengers.
The multiple fuel surcharges imposed by the flag carriers
have resulted in many more passengers flocking to Ryanair
to avail of our lowest fares and our “no fuel surcharge”
guarantee which has in turn enabled us to grow, and increase
profitability. We also believe that continuing high fuel prices
will impact some of our competitors in Europe and we
anticipate that there will be further consolidation and other
carriers will depart from the industry. We re-affirm our ”no
fuel surcharge” guarantee for all our passengers and we will
continue to absorb these higher fuel charges through a
combination of cost reductions and further increasing the
efficiency of our operations.
Raymond MacSharry is retiring as a director of Ryanair at the
forthcoming Annual General Meeting. I would like to take
this opportunity to thank Raymond on behalf of, the
shareholders, the board, and myself for his outstanding
contribution as a director and former chairman to the
success of Ryanair over a period of almost 14 years. All of us
wish Raymond the very best for the future.
We look forward with confidence that Ryanair will continue to
successfully roll out its lowest-fares model, so that many
more Europeans can benefit from Ryanair’s low fares whilst
we, at the same time, deliver increasing returns for our
shareholders.
Yours sincerely
David Bonderman
Chairman
I am proud of our achievements during a year that was very challenging due to the
impact on our business of higher fuel prices. I am therefore pleased that Ryanair
has delivered a 12% increase in adjusted net profit after tax to 302m despite a
74% increase in our fuel costs. This demonstrates the fundamental strength of our
business model which can deliver rising profits even during periods of difficult
trading conditions.
Chairman’s Report
4
ANNUAL REPORT & FINANCIAL STATEMENTS 2006
Dear Shareholders,