Ryanair 2012 Annual Report Download - page 88

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of disposals) to the fleet during the 2011 fiscal year. See ―—Critical Accounting Policies—Long-lived Assets‖
above.
Fuel and oil. Ryanair‘s fuel and oil costs per ASM increased by 16.0%, while in absolute terms, these
costs increased by 37.3% from €893.9 million in the 2010 fiscal year to €1,227.0 million in the 2011 fiscal year,
in each case after giving effect to the Company‘s fuel hedging activities. The 37.3% increase reflected a 15.8%
increase in average fuel prices paid, the impact of a 17.4% increase in the number of hours flown and a 9.9%
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) increased 15.8% from €1.52 per U.S. gallon in the
2010 fiscal year to €1.76 per U.S. gallon in the 2011 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, decreased 7.3% on a per-
ASM basis, while in absolute terms these expenses increased by 9.2% from €86.0 million in the 2010 fiscal year
to €93.9 million in the 2011 fiscal year. The increase in absolute terms during the fiscal year reflected the
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.
Aircraft rentals. Aircraft rental expenses amounted to €97.2 million in the 2011 fiscal year, a 1.8%
increase from the €95.5 million reported in the 2010 fiscal year, reflecting the net impact of the return of ten
aircraft under operating lease and the addition of six aircraft leased during the year.
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 €336.3 million in the 2010 fiscal year to €410.6 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 €459.1 million in the 2010 fiscal year, to €491.8 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 €144.8 million in the
2010 fiscal year to €167.0 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 €29.7 million consisting of €28.0 million in operating expenses (including passenger
compensation of €12.4 million pursuant to Regulation (EC) No. 261/2004 (―EU261‖) and €1.7 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 ...............................................................................
€4.6
Depreciation ...........................................................................
€4.7
Fuel and oil .............................................................................
€0.3
Maintenance, materials and repairs ........................................
-
Aircraft rentals .......................................................................
€2.0
Route charges .........................................................................
€0.1
Airport and handling charges .................................................
€0.9
Marketing, distribution and other (includes €12.4 million
passenger compensation costs pursuant to EU261) .............
€15.4
Total operating expenses ........................................................
€28.0