Ryanair 2011 Annual Report Download - page 84

82
Fiscal Year
Ended
March 31,
2011
Fiscal Year
Ended
March 31,
2010 % Change
Staff costs ............................................................................... 0.59 0.63 (5.1)%
Depreciation
................................
................................
...........
0.44
0.44
(0.4)%
Fuel and oil ............................................................................. 1.94 1.67 16.0%
Maintenance, materials and repairs
................................
........
0.15
0.16
(7.3)%
Aircraft rentals ....................................................................... 0.15 0.18 (14.8)%
Route charges ......................................................................... 0.65 0.63 2.9%
Airport and handling charges
................................
.................
0.78
0.86
(9.7)%
Marketing, distribution and other ........................................... 0.26
0.27 (2.4)%
Total operating expenses ........................................................ 4.96
4.84 2.5%
Staff costs. Ryanair’s staff costs, which consist primarily of salaries, wages and benefits, decreased
5.1% on a per-ASM basis, while in absolute terms, these costs increased 12.3%, from 1335.0 million in the 2010
fiscal year to 1376.1 million in the 2011 fiscal year. The increase in absolute terms was primarily attributable to
a 14.7% increase in average headcount to 8,069, which was partially offset by the impact of a Company-wide
pay freeze then in effect, the higher proportion of contract crew operating during the year, and the rise, during
the year, in the proportion of cabin crew members who earn below-average salaries. Employee numbers rose
due to the growth of the business.
Depreciation and amortization. Ryanair’s depreciation and amortization per ASM decreased by 0.4%,
while in absolute terms these costs increased 18.0% from 1235.4 million in the 2010 fiscal year, to 1277.7
million in the 2011 fiscal year. The increase was primarily attributable to the addition of 44 owned aircraft (net
of disposals) to the fleet during the 2011 fiscal year. See “—Critical Accounting Policies—Long-lived Assets”
above.
Fuel and oil. Ryanair’s fuel and oil costs per ASM increased by 16.0%, while in absolute terms, these
costs increased by 37.3% from 1893.9 million in the 2010 fiscal year to 11,227.0 million in the 2011 fiscal year,
in each case after giving effect to the Company’s fuel hedging activities. The 37.3% increase reflected a 15.8%
increase in average fuel prices paid, the impact of a 17.4% increase in the number of hours flown and a 9.9%
increase in the average sector length. Fuel and oil costs include the direct cost of fuel, the cost of delivering fuel
to the aircraft, and aircraft de-icing costs. Fuel and oil costs include the direct cost of fuel, the cost of delivering
fuel to the aircraft, and aircraft de-icing costs. The average fuel price paid by Ryanair (calculated by dividing
total fuel costs by the number of U.S. gallons of fuel consumed) increased 15.8% from 11.52 per U.S. gallon in
the 2010 fiscal year to 11.76 per U.S. gallon in the 2011 fiscal year, in each case after giving effect to the
Company’s fuel hedging activities.
Maintenance, materials and repairs. Ryanair’s maintenance, materials and repair expenses, which
consist primarily of the cost of routine maintenance and the overhaul of spare parts, decreased 7.3% on a per-
ASM basis, while in absolute terms these expenses increased by 9.2% from 186.0 million in the 2010 fiscal year
to 193.9 million in the 2011 fiscal year. The increase in absolute terms during the fiscal year reflected the
additional costs arising from increased line maintenance activity at new bases and costs incurred to satisfy
provisions of lease contracts dealing with the condition of aircraft due to be returned in 2010 and 2011.
Aircraft rentals. Aircraft rental expenses amounted to 197.2 million in the 2011 fiscal year, a 1.8%
increase from the 195.5 million reported in the 2010 fiscal year, reflecting the net impact of the return of ten
aircraft under operating lease and the addition of six aircraft leased during the year.