Ryanair 2011 Annual Report Download - page 49

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key employee without adequate replacement or the inability to attract new qualified personnel could have a
material adverse effect upon the Company’s business, operating results, and financial condition.
The Company Faces Risks Related to its Internet Reservations Operations and its Announced
Elimination of Airport Check-in Facilities. Approximately 99% of Ryanair’s flight reservations are made
through its website. Although the Company has established a contingency program whereby the website is
hosted in three separate locations, each of these locations accesses the same booking engine, located at a single
center, in order to make reservations.
A back-up booking engine is available to Ryanair to support its existing platform in the event of a
breakdown in this facility. Nonetheless, the process of switching over to the back-up engine could take some
time and there can be no assurance that Ryanair would not suffer a significant loss of reservations in the event of
a major breakdown of its booking engine or other related systems, which, in turn, could have a material adverse
affect on the Company’s operating results or financial condition.
Since October 1, 2009, all passengers have been required to use Internet check-in. Internet check-in is
part of a package of measures intended to reduce check-in lines and passenger handling costs and pass on these
savings by reducing passenger airfares. See “Item 4. Information on the Company—Reservations/Ryanair.com.”
The Company has deployed this system across its network. Any disruptions to the Internet check-in service as a
result of a breakdown in the relevant computer systems or otherwise could have a material adverse impact on
these service-improvement and cost-reduction efforts. The result of this requirement is that Ryanair has reduced
airport and handling costs, as a result of the need to have fewer check-in personnel and rented check-in desks.
There can be no assurance, however, that this process will continue to be successful or that consumers will not
switch to other carriers that provide standard check-in facilities, which would negatively affect the Company’s
results of operations and financial condition.
The Company Faces Risks Related to Unauthorized Use of Information from the Company’s Website.
Screenscraper websites gain unauthorized access to Ryanair’s website and booking system, extract flight and
pricing information and display it on their own websites for sale to customers at prices which include
intermediary fees on top of Ryanair’s fares. Ryanair does not allow any such commercial use of its website and
objects to the practice of screenscraping also on the basis of certain legal principles, such as database rights,
copyright protection, etc. The Company is involved in a number of legal proceedings against the proprietors of
screenscraper websites in Ireland, Germany, the Netherlands, France, Spain, Italy and Switzerland. The
Company’s objective is to prevent any unauthorized use of its website. The Company has received favorable
rulings in Ireland, Germany and The Netherlands. However, pending the outcome of these legal proceedings and
if Ryanair were to be unsuccessful in them, the activities of screenscraper websites could lead to a reduction in
the number of customers who book directly on Ryanair’s website and consequently in a reduction in the
Company’s ancillary revenue stream. Also, some customers may be lost to the Company once they are
presented by a screenscraper website with a Ryanair fare inflated by the screenscraper’s intermediary fee. This
could also adversely affect Ryanair’s reputation as a low-fares airline, which could negatively affect the
Company’s results of operations and financial condition. For additional details, see “Item 8. Financial
Information—Other Financial Information—Legal Proceedings—Legal Proceedings Against Internet Ticket
Touts.”
Irish Corporation Tax Rate Could Rise. The majority of Ryanair’s profits are subject to Irish
Corporation Tax at a statutory rate of 12.5%. Due to the size and scale of the Irish government’s budgetary
deficit and the recent “bailout” of the Irish government by a combination of loans from the International
Monetary Fund and the European Union, there is a risk that the Irish government could increase Irish
Corporation Tax rates above 12.5% in order to repay current or future loans or to increase tax revenues.
At 12.5%, the rate of Irish Corporation Tax is lower than that applied by most of the other European
Union member states, and has periodically been subject to critical comment by the governments of other EU
member states. Although the Irish government has publicly stated that it will not increase Corporation Tax rates,
there can be no assurance that such an increase in Corporation Tax rates will not occur.
In the event that the Irish government increases Corporation Tax rates or changes the basis of
calculation of Corporation Tax from the present basis, any such changes would result in Ryanair paying higher
corporate taxes and would have an adverse impact on our cash flows, financial position and results of
operations.