Ryanair, the Irish budget airline, has warned that its profits will slow dramatically due to “soft” marketing conditions caused by higher airport taxes and increased passenger duties. It has predicted a 5% decrease in profits over the next financial year.
The airline made the prediction as it reported a 33% increase in net profit to £272m for the year to the end of March. It says it expects passenger numbers to continue to rise following an increase of 22% to 42.5m during the last financial year and forecasts that this will reach 52m over the next year as it increases its fleet with 30 new aircraft.
Chief executive Michael O’Leary says: “If market conditions continue to be soft, as is presently the case, then this ambitious traffic growth can only be delivered by discounting fares and reducing yields.”
He adds that higher passenger spend, increased penetration and the growth in excess baggage revenues helped boost ancillary revenues.