Ryanair 2012 Annual Report Download - page 52

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Volcanic emissions may happen again and could lead to further significant flight cancellation costs
which could have a material adverse impact on the Company‘s financial condition and results of operations.
Furthermore, volcanic emissions (whether from current or new sources) or similar atmospheric disturbances and
resulting cancellations due to the closure of airports could also have a material adverse affect on the Company‘s
financial performance indirectly, as a consequence of changes in the public‘s willingness to travel within Europe
due to the risk of flight disruptions.
Any Significant Outbreak of any Airborne Disease, Including Swine Flu or Foot-and-Mouth Disease,
Could Significantly Damage Ryanair’s Business. Worldwide, there has, from time to time, been substantial
publicity in recent years regarding certain potent influenza viruses and other disease epidemics. Publicity of this
type may have a negative impact on demand for air travel in Europe. Past outbreaks of SARS, foot-and-mouth
disease, avian flu and swine flu have adversely impacted the travel industries, including aviation, in certain
regions of the world, including Europe. The Company believes that if any influenza or other pandemic becomes
severe in Europe, its effect on demand for air travel in the markets in which Ryanair operates could be material,
and it could therefore have a significantly adverse impact on the Company. A severe outbreak of swine flu,
SARS, foot-and-mouth disease, avian flu or another pandemic or livestock-related disease also may result in
European or national authorities imposing restrictions on travel, further damaging Ryanair‘s business. A serious
pandemic could therefore severely disrupt Ryanair‘s business, resulting in the cancellation or loss of bookings,
and adversely affecting Ryanair‘s financial condition and results of operations.
Introduction of New or Increases in Existing Aviation Taxes Could Increase Costs. A number of
European states, including the United Kingdom, Ireland, Germany and Austria, currently impose taxes on air
travel, often disguised as environmental taxes. Although the Netherlands reduced its aviation tax to zero in 2009
and Ireland reduced its tax from €10 to €3 in March 2011, due to government budgetary deficits these taxes may
be reinstated in their previous or a new form. Further, other state governments or the European Union may
introduce aviation taxation. Any such taxes would increase costs and could have a negative impact on demand
for air travel. See also ―—Environmental Regulation—Aviation Taxes‖ below.
The Company is Dependent on the Continued Acceptance of Low-fares Airlines. In past years,
accidents or other safety-related incidents involving certain low-fares airlines have had a negative impact on the
public‘s acceptance of such airlines. Any adverse event potentially relating to the safety or reliability of low-
fares airlines (including accidents or negative reports from regulatory authorities) could adversely impact the
public‘s perception of, and confidence in, low-fares airlines like Ryanair, and could have a material adverse
effect on the Company‘s financial condition and results of operations.
Terrorism in the United Kingdom or Elsewhere in Europe Could Have a Material Detrimental Effect
on the Company. On August 10, 2006, U.K. security authorities arrested and subsequently charged eight
individuals in connection with an alleged plot to attack aircraft operating on transatlantic routes. As a result of
these arrests, U.K. authorities introduced increased security measures, which resulted in all passengers being
body-searched, and a ban on the transportation in carry-on baggage of certain liquids and gels. The introduction
of these measures led to passengers suffering severe delays while passing through these airport security checks.
As a result, Ryanair cancelled 279 flights in the days following the incident and refunded a total of €2.7 million
in fares to approximately 40,000 passengers. In the days following the arrests, Ryanair also suffered reductions
in bookings estimated to have resulted in the loss of approximately €1.9 million of additional revenue. As in the
past, the Company reacted to these adverse events by initiating system-wide fare sales to stimulate demand for
air travel.
In addition, reservations on Ryanair‘s flights to London dropped materially for a number of days in the
immediate aftermath of the terrorist attacks in London on July 7, 2005. Although the terrorist attack in Glasgow
on June 30, 2007 and the failed terrorist attacks in London on July 21, 2005 and June 29, 2007 had no material
impact on bookings, there can be no assurance that future such attacks will not affect passenger traffic. In the
2012 fiscal year, 16.0 million passengers were booked on Ryanair‘s flights into and out of London, representing
21.0% of the total passengers booked on all of the Company‘s flights in the fiscal year. Future acts of terrorism
or significant terrorist threats, particularly in London or other markets that are significant to Ryanair, could have
a material adverse effect on the Company‘s profitability or financial condition should the public‘s willingness to
travel to and from those markets decline as a result. See also ―—The 2001 Terrorist Attacks on the United States
Had a Severe Negative Impact on the International Airline Industry‖ below.