Ryanair 2011 Annual Report Download - page 88

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million in the 2010 fiscal year. The decrease was recorded notwithstanding the addition of 39 owned aircraft
(net of disposals) to the fleet during the 2010 fiscal year, as the figure for the 2009 fiscal year had included
accelerated depreciation of 151.6 million in relation to aircraft disposals during the year and an agreement to
dispose of additional aircraft in the 2010 fiscal year, while there was no such accelerated depreciation
recognized in the 2010 fiscal year. See “—Critical Accounting Policies—Long-lived Assets” above.
Fuel and oil. Ryanair’s fuel and oil costs per ASM decreased by 37.4%, while in absolute terms, these
costs decreased by 28.9% from 11,257.1 million in the 2009 fiscal year to 1893.9 million in the 2010 fiscal year,
in each case after giving effect to the Company’s fuel hedging activities. The 28.9% decrease reflected a 35.6%
decrease in average fuel prices paid, the impact of which was partially offset by a 12.8% increase in the number
of hours flown and a 1.0% 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. The average fuel price paid by Ryanair
(calculated by dividing total fuel costs by the number of U.S. gallons of fuel consumed) decreased 35.6% from
12.35 per U.S. gallon in the 2009 fiscal year to 11.52 per U.S. gallon in the 2010 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, increased 13.4% on a per-
ASM basis, while in absolute terms these expenses increased by 28.7% from 166.8 million in the 2009 fiscal
year to 186.0 million in the 2010 fiscal year. The increase in absolute terms during the fiscal year reflected an
increase in the average number of leased Boeing 737-800 aircraft, which grew from 40 to 50 during the year,
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. These
factors were offset in part by the positive impact of the weakening of the euro against the U.S. dollar during the
period, as many of these expenses are denominated in U.S. dollars.
Aircraft rentals. Aircraft rental expenses amounted to 195.5 million in the 2010 fiscal year, a 22.1%
increase from the 178.2 million reported in the 2009 fiscal year, reflecting an increase in the weighted average
number of leased Boeing 737-800 aircraft by ten, bringing the total to 50 during the 2010 fiscal year, the
negative effect of which was somewhat offset by lower lease rates and the impact of a weaker euro versus the
U.S. dollar.
Route charges and airport and handling charges. Ryanair’s route charges per ASM increased 3.4% in
the 2010 fiscal year, while airport and handling charges per ASM decreased 8.8%. In absolute terms, route
charges increased 17.3%, from 1286.6 million in the 2009 fiscal year to 1336.3 million in the 2010 fiscal year,
primarily as a result of the 12.3% increase in sectors flown. In absolute terms, airport and handling charges
increased 3.5%, from 1443.4 million in the 2009 fiscal year, to 1459.1 million in the 2010 fiscal year, reflecting
the overall growth in passenger volumes, partially offset by lower average costs at Ryanair’s newer airports and
bases.
Marketing, distribution and other expenses. Ryanair’s marketing, distribution and other operating
expenses, including those applicable to the generation of ancillary revenues, decreased 16.0% on a per-ASM
basis in the 2010 fiscal year, while in absolute terms, these costs decreased 4.7%, from 1151.9 million in the
2009 fiscal year to 1144.8 million in the 2010 fiscal year, with the overall decrease primarily reflecting the
achievement of cost reductions, through an increased focus on Internet-based selling.
Operating profit. As a result of the factors outlined above, operating profit more than tripled on a per-
ASM basis in the 2010 fiscal year, and also increased sharply in absolute terms, from 192.6 million in the 2009
fiscal year to 1402.1 million in the 2010 fiscal year.
Finance income. Ryanair’s interest and similar income decreased 68.8%, from 175.5 million in the
2009 fiscal year to 123.5 million in the 2010 fiscal year reflecting the combined impact of lower market interest
rates and a shift in the Company’s policy towards placing its deposits with highly rated and guaranteed financial
institutions which typically provide a lower yield, which factors were partially offset by higher average cash
balances on hand.
Finance expense. Ryanair’s interest and similar charges decreased 44.7%, from 1130.5 million in the
2009 fiscal year to 172.1 million in the 2010 fiscal year, primarily due to the impact of lower market interest