Ryanair 2010 Annual Report Download - page 8

6
CHIEF EXECUTIVE’S REPORT
Dear Shareholders,
I am pleased to report that over the past year Ryanair has continued to grow strongly and profitably,
despite high oil prices and a deep recession in Europe. We have reported a substantial 204% growth in
adjusted profits to 1318.8m. While this is an excellent result, it is still less than the 1481m recorded in the year
ended March 2008. All the key indicators including traffic growth, market share, unit costs, profits, new route
and base development, confirm that Ryanair continues to successfully roll out our unique low fares formula
across Europe for the benefit of our passengers, our people and our shareholders.
Our prices and costs
Our traffic last year grew 14% to 66.5m passengers. The key to this growth was Ryanair’s determination
to drive down air fares, and the cost of flying for consumers all over Europe. Average fares fell by 13% to just
135 (a figure which includes our optional checked in baggage fees) which proves that even during a recession,
consumers can still save hundreds of millions of euro by flying with Ryanair. As well as being Europe’s
lowest fare airline, Ryanair uniquely guarantees “no fuel surcharges” regardless of how high oil prices rise,
while many of our flag carrier competitors continue to levy unjustified fuel surcharges. This means that more
and more are switching to Ryanair for our lower fares and better punctuality.
Our entire team have continued to focus relentlessly on cost reductions. This is reflected by the fact that
(excluding fuel), our unit costs fell by 3%, despite a 1% rise in average sector lengths. We did benefit from
lower oil prices last year because we refused to hedge in mid 2008, while oil prices were nearing $140 a
barrel. While oil prices have been creeping upwards in recent months, we continue to focus on reducing costs
in all other areas. Management and staff have agreed a third year of pay freezes. We have significantly
reduced airport costs by switching capacity away from high cost airports like Dublin and Stansted towards
lower cost airports in Germany, Italy, Portugal and Spain. We have continued to promote our popular web
check-in service and we are incentivising passengers to travel with up to 10kgs of carry-on baggage free of
charge, while increasing the cost of checked in bags. Many Ryanair flights now operate with less than 25% of
passengers carrying checked in bags, compared to 80% of passengers two years ago. This means that we are
reducing airport/passenger handling costs, while passengers are wasting far less time at airports by avoiding
check-in queues on departure or waiting for baggage carousels on arrival.
This is the future for short-haul, low cost air travel, and offers considerable opportunities for cost savings
for both airlines and airports who are willing to build efficient, low cost terminal facilities (such as Brussels
Charleroi, Düsseldorf Weeze and Marseille) as opposed to those high cost monopoly airports like Dublin and
Stansted, who prefer to waste money building expensive, inefficient, complicated airport terminals which
airlines don’t want and passengers don’t need.
Our Passengers
When it comes to passenger service, no one beats Ryanair. Because price is the key factor in most air
travellers’ decisions, and because Ryanair beats every other airline on price, this explains why Ryanair has
grown to become the world’s favourite international airline, with 67m passengers carried last year. Ryanair’s
success is not due to price alone. In addition to the lowest fares in every market, we also offer:
1. The best punctuality – last year 88% of all flights arrived on-time.
2. The fewest lost bags – last year we lost less than one bag for every 2,500 passengers carried.
3. The fewest complaints – last year we received less than one complaint per 1,000 passengers carried.
4. The newest fleet – the average age of Ryanair’s 232 aircraft is now just 2.9 years.
5. Europe’s greenest, cleanest airline – independent surveys confirm that Ryanair is the best performing EU
airline in terms of emissions per passenger.
6. Prompt response to passengers – last year Ryanair replied to more than 99.9% of passenger complaints
within our committed 7 working days of receipt.
As our growth testifies, Ryanair continues to provide customers with what they really want, safe, reliable,
lowest cost air travel, which is why with over 73m passengers this year we continue to be the world’s
favourite international scheduled airline.