Ryanair 2009 Annual Report Download - page 81

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Marketing and Distribution Costs. Ryanair’s marketing and distribution costs (including baggage-
handling commissions) per ASM decreased 34.8%, while in absolute terms these costs decreased by 25.7%,
from €17.2 million in the 2008 fiscal year to €12.8 million in the 2009 fiscal year. The decrease in absolute
terms was primarily the result of tight control on expenditure and the increased focus on Internet-based
promotions.
Aircraft Rentals. Ryanair recorded €78.2 million in aircraft rental expenses during the 2009 fiscal year,
a 7.6% increase from the €72.7 million reported in the 2008 fiscal year, reflecting an increase in the weighted
average number of leased Boeing 737-800 aircraft by eight, bringing the total to 43 during the 2009 fiscal year,
the negative effect of which was somewhat offset by lower lease rates and the impact of a stronger Euro versus
the U.S. dollar.
Route Charges and Airport and Handling Charges. Ryanair’s route charges per ASM decreased 3.0%
in the 2009 fiscal year, while airport and handling charges per ASM decreased 1.8%. In absolute terms, route
charges increased 10.5%, from €259.3 million in the 2008 fiscal year to €286.6 million in the 2009 fiscal year,
primarily as a result of the 15.2% increase in sectors flown (the effect of which was offset in part by the
decrease of 1.1% in average sector length). In absolute terms, airport and handling charges increased 11.9%,
from €396.3 million in the 2008 fiscal year, to €443.4 million in the 2009 fiscal year, reflecting the overall
growth in passenger volumes as well as increased costs at London (Stansted) airport, where unit costs doubled
during the 2009 fiscal year, and higher charges at Dublin Airport, both offset in part by lower average costs at
Ryanair’s newer airports and bases.
Other Expenses. Ryanair’s other operating expenses, including those applicable to the generation of
ancillary revenues, decreased 3.3% on a per ASM basis in the 2009 fiscal year, while in absolute terms, these
costs increased 14.1%, from €122.0 million in the 2008 fiscal year to €139.1 million in the 2009 fiscal year,
with the overall increase primarily reflecting increased passenger numbers.
Operating Profit. As a result of the factors outlined above, operating profit decreased 84.8% on a per-
ASM basis in the 2009 fiscal year, and decreased 82.7% in absolute terms, from €537.1 million in the 2008
fiscal year to €92.6 million in the 2009 fiscal year.
Finance Income. Ryanair’s interest and similar income decreased 10.0%, from €84.0 million in the
2008 fiscal year to €75.5 million in the 2009 fiscal year, primarily reflecting lower average interest rates
received on its deposits during the year, the impact of which was partially offset by higher average cash
balances on hand.
Finance Expense. Ryanair’s interest payable and similar charges increased 34.5%, from €97.1 million
in the 2008 fiscal year to €130.5 million in the 2009 fiscal year, reflecting the increase in debt related to the
acquisition of additional Boeing 737-800 aircraft. These costs are expected to continue to increase as Ryanair
further expands its fleet.
Foreign Exchange Gains (Losses). Ryanair recorded foreign exchange gains of €4.4 million in the
2009 fiscal year, as compared with foreign exchange losses of €5.6 million in the 2008 fiscal year, with the
different result being primarily due to the positive impact of changes in the U.K. pound sterling and U.S. dollar
exchange rates against the Euro during the 2009 fiscal year.
Taxation. The tax credit of €11.3 million recorded in the 2009 fiscal year was primarily due to the
recognition of a deferred tax asset of €34.3 million in respect of net operating losses incurred and available to
carry-forward to future periods. The recoverability of the deferred tax asset is based on future income forecasts
which demonstrate that it is more likely than not that future profits will be available in order to utilize the
deferred tax asset. The deferred tax asset’s recoverability is not dependent on material improvements over
historical levels of pre-tax income, material changes in the present relationship between income reported for
financial and tax purposes, or material asset sales or other non-routine transactions. The effective tax rate for the
2009 fiscal year was a tax benefit of (6.3%), as compared to the effective tax rate of 11.0% in the 2008 fiscal
year. The effective tax rate reflects the statutory rate of Irish corporation tax of 12.5%, the positive impact of the
reduced rates tax applicable to Ryanair.com and other Internet-related businesses and the loss due to the
impairment of the Company’s available-for-sale financial asset (which is not subject to corporation tax).