Ryanair sticks to target despite volcano air chaos

BUDGET airline Ryanair is keeping its full-year profit target despite a 24 per cent fall in quarterly profits caused by disruption from the volcanic ash cloud.

Europe's biggest low-cost carrier said net profits for the three months to June 30 fell to 79m after accounting for the 42m cost of almost 10,000 flights cancelled in April and May.

Ryanair, which opened at Leeds-Bradford earlier this year, said it should be able to grow full-year profits by up to 15 per cent.

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Chief executive Michael O'Leary said: "Despite these volcanic ash disruptions Ryanair continues to increase traffic, yields, and profits, while most of our competitors are cutting capacity and reporting losses."

The ash cloud resulted in the loss of around 1.5 million passengers. After initially refusing to compensate customers beyond a refund for their ticket, Ryanair subsequently agreed to cover the costs of refreshments and accommodation for passengers who could not get home.

The airline is still processing claims under the "unfair and disproportionate" EU regulations, adding that it will be some time before the exact cost of the cancellations is known. Fuel costs rose by 34 per cent to 243.3m due to higher oil prices and the introduction of new routes.

Ryanair said it is on track to raise average fares by up to 10 per cent this year as it shifts capacity from Northern to Southern European destinations with longer routes and relatively high summer ticket prices.

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Most of Ryanair's growth comes from the continent and it is reducing capacity in Dublin, blaming a tourist tax introduced last year as part of Ireland's austerity drive.

Earlier this month Ryanair announced plans to expand its winter schedule at Leeds-Bradford Airport, despite an overall 16 per cent cut in winter capacity across the country.

The group is to operate two aircraft on 13 routes, including new routes to and from Barcelona, Dusseldorf, Gdansk in Poland and Fuerteventura, in an expansion that should see Ryanair's traffic at Leeds-Bradford grow to one million passengers a year.