Ryanair gloomy despite huge profits
Ireland - Budget airline Ryanair, which says it is considering charging passengers to use the toilet, announced a huge increase in profits Monday, revealing recession-busting results in sharp contrast to other carriers grounded by financial trouble. The Irish airline, which boosts revenues by billing for baggage, snacks and even checking in, announced a first quarter profit increase of 550 percent -- or $195 million -- crediting a drop in fuel prices and increased traffic for the growth. But despite bullish promises of expansion, Ryanair boss Michael O'Leary warned that the full year outlook remained gloomy with a fierce price war likely to result in a yield decline of more than 20 percent.
1 comment:
Ryanair like other low-cost carriers are in difficulties due to their business model. They must offer low prices to attract passengers, but right now, as the demand is low, they cut their margins and make less profits. Ryanair will resist because to its financial assets, but for how long? Other low-cost carriers won't resist long, especially during wintertime when the demand is very low.
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