Ryanair 2011 Annual Report Download - page 85

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Route charges and airport and handling charges. Ryanair’s route charges per ASM increased 2.9% in
the 2011 fiscal year, while airport and handling charges per ASM decreased 9.7%. In absolute terms, route
charges increased 22.1%, from 1336.3 million in the 2010 fiscal year to 1410.6 million in the 2011 fiscal year,
primarily as a result of the 8.3% increase in sectors flown. In absolute terms, airport and handling charges
increased 7.1%, from 1459.1 million in the 2010 fiscal year, to 1491.8 million in the 2011 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 2.4% on a per-ASM
basis in the 2011 fiscal year, while in absolute terms, these costs increased 15.3%, from 1144.8 million in the
2010 fiscal year to 1167.0 million in the 2011 fiscal year, with the overall increase primarily reflecting the
higher level of activity and increase in airport commissions on revenues generated.
Icelandic ash related costs. The closure of European airspace in April and May 2010, due to the
Icelandic volcanic ash disruption, resulted in the cancellation of 9,490 Ryanair flights. The impact on Ryanair’s
profit before tax totaled 129.7 million consisting of 128.0 million in operating expenses (including passenger
compensation of 112.4 million pursuant to Regulation (EC) No. 261/2004 (“EU261”) and 11.7 million of other
income/expense attributable to the period of flight disruption. The following table sets forth the components of
Icelandic volcanic ash related costs associated with each category of operating expense:
Fiscal Year
Ended
March 31, 2011
(in millions of euro)
Staff costs
................................
................................
...............
14.6
Depreciation ........................................................................... 14.7
Fuel and oil
................................
................................
.............
10.3
Maintenance, materials and repairs ........................................ -
Aircraft rentals ....................................................................... 12.0
Route charges ......................................................................... 10.1
Airport and handling charges ................................................. 10.9
Marketing, distribution and other (includes
112.4 million
passenger compensation costs pursuant to EU261) ............. 115.4
Total operating expenses ........................................................ 128.0
Operating profit. As a result of the factors outlined above, operating profit increased 2.5% on a per-
ASM basis in the 2011 fiscal year, and also increased in absolute terms, from 1402.1 million in the 2010 fiscal
year to 1488.2 million in the 2011 fiscal year. See “Item 3. Key Information—Risk Factors—Ryanair Has
Decided to Seasonally Ground Aircraft. The Company’s decision to ground aircraft did not have a material
impact on the results of the Company for the year ended March 31, 2011 and, at present, is not anticipated to
have a material impact on future operations. The Company anticipates that any revenues which could have been
generated had the Company operated the grounded aircraft, would have been lower than the operating costs
associated with operating these aircraft, due to significantly higher fuel costs, airport charges and taxes. The
Company does not anticipate that any material staff costs will be incurred during future periods of the grounding
of aircraft, as the relevant staff can be furloughed under the terms of their contract without compensation and the
maintenance costs associated with the grounded aircraft will be minimal. However, the Company will still incur
aircraft ownership costs comprised of depreciation and amortization costs, lease rentals costs and financing
costs.
Finance income. Ryanair’s interest and similar income increased 15.8%, from 123.5 million in the
2010 fiscal year to 127.2 million in the 2011 fiscal year reflecting the impact of higher market interest rates
which was partially offset by the Company’s policy of continuing to place its deposits with highly rated and
guaranteed financial institutions which typically provide a lower yield.