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Ryanair reaps benefits of listening to customers

Ryanair has tried to give customers fewer reasons to book flights with more expensive airlines. Picture: Getty

Ryanair has tried to give customers fewer reasons to book flights with more expensive airlines. Picture: Getty

  • by MARTIN FLANAGAN
 

RYANAIR is revving up for expansion in Europe after boss Michael O’Leary claimed its new customer-friendly approach was winning passengers from rivals.

Europe’s biggest no-frills airline has let travellers choose their seats, eased restrictions on hand luggage and cut penalty charges, giving them fewer reasons to book flights with more expensive, full-service airlines.

It is also trying to focus on more primary airports that land travellers closer to their destinations, addressing another weakness against competitors.

The changes followed a fall in profits last year that pushed the Irish airline to rethink a focus on price over service that often left customers disgruntled and tarnished an image chief executive O’Leary admitted was seen as “cheap and nasty”.

The company more than doubled earnings in the first trading quarter and lifted its profit guidance for the full year while it plans to return €520 million (£411m) through a special dividend in the fourth quarter.

O’Leary, pictured, said bases at Athens, Brussels, Lisbon and Rome were performing strongly, with others due to open this winter in Glasgow, Cologne, Gdansk and Warsaw. New routes and frequencies at Stansted and Dublin were due to increase substantially, with more investment to attract business customers.

“We are overrun with growth offers from primary European airports whose incumbent flag and regional carriers continue to cut capacity and traffic,” he said.

“These airports, along with our existing 69 bases, offer Ryanair significant growth opportunities as the first of our 180 new Boeing order delivers this September.”

Profits soared 152 per cent to €197m in the three months to 30 June. Ryanair said more passengers and cost-savings meant full-year earnings were now expected at €620-€650m, up from €580m-€620m.

For the first quarter, passenger numbers were up 4 per cent to 24.3 million and they travelled on planes that were 86 per cent full after a 4 per cent rise in load factor.

Revenues lifted 11 per cent to €1.34 billion as fares rose 9 per cent, boosted by a strong Easter holiday period.

The carrier also raised support revenues 4 per cent as reductions in airport and baggage fees were offset by a rising uptake of allocated seating.

A new business service will be launched in September to include same-day flight changes, bigger bag allowances, premium seat allocation and fast-track through security at many airports.

O’Leary said that, based on first quarter results and bookings, the firm was on track for a strong first half. However, he warned against “irrational exuberance” as the second half was likely to see downward pressure on fares as a result of competition and Ryanair’s increased capacity.

He said the economic environment remained difficult.

 

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