Budget airline Ryanair posted its first drop in annual profits in five years yesterday as price wars and efforts to improve its image weighed on its bottom line.
After tax, profits were down 8 per cent at €523 million (£426.5m) in the year to 31 March, but the group said customer service was improving “rapidly”.
Changes have included the relaxation of bag restrictions for passengers, a reduction in baggage charges and an easing of booking conditions.
The airline, which operates more than 1,600 routes from 68 bases, has also moved to fully allocated seating on all flights.
Chief executive Michael O’Leary described the performance as disappointing but said efforts since September to reinvent Ryanair’s image and reputation helped passenger traffic rise 4 per cent in the second half of the year.
The carrier has also seen better booking trends and fuller planes in the current year.
The company expects to fly 84.6 million passengers in the 12 month to the end of March 2015 – a 4 per cent rise on a year earlier – although it remains “very cautious” about booking trends for the winter period.
Overall, the airline is predicting a recovery in profits for the current year to between €580m and €620m.