Ryanair struggles to fill seats
Ryanair says it carried fewer passengers per seat available last month, compared with year-ago figures, as it struggled to fill capacity on its expanded network. The Irish no-frills airline RYA.I said on Wednesday its February load factor — which measures the proportion of seats filled — slipped to 77 percent from 81 percent in February 2003. The four percentage point decline compared with a fall of five percentage points in January.
The airline said passenger traffic grew by 45 percent to 1.9 million in February versus the same month last year. Analysts said they expected little let-up in pressure on the airline’s load factor while it adds new routes and more planes, in a bid to boost annual passenger volume by 50 percent to 24 million this year. Ryanair has opened two new European bases in Rome and Barcelona since the start of 2004.
“This (expansion) is due to slow down from May and we should see load factors stabilizing then before starting to improve,” said John Mattimoe, analyst at Merrion Stockbrokers. Load factors by then will also benefit, in year-on-year comparisons, from the lower base in year-ago figures, he added. Investor confidence in Ryanair was shaken by a shock profit warning last month, when the airline said annual profit could fall as much as 10 percent as it slashes ticket prices to fill seats in the face of tough competition.
“Yield trends remain the critical issue and will determine future investor interest,” added Mattimoe. Yield refers to average revenue per passenger carried.
At 2:12 p.m., Ryanair shares were trading 0.6 percent lower at 4.87 euros on a slightly firmer Irish bourse.
Ryanair has also been hit by a Brussels ruling ordering it to repay millions in illegal state aid it received at its Belgian hub of Charleroi, south of Brussels.
As a result of its feud with the European Commission, the airline said it was axing its London-Brussels route and threatened to withdraw further services from Charleroi.
The airline has pledged to appeal the Commission’s ruling.
By Stephen Cunningham
Travelvideo.TV – your news source for the travel and tourism industry.
March 4, 2004
Posted in: Airlines & Railways