Chief executive Michael O’Leary says profitability doubled over three years even though fares were reduced by 13%. Ryanair announced a record annual profit on Tuesday in a vindication of its strategy of cutting fares to boost market share, and said it planned to turn up the heat further on rivals.
Its warning to competitors came as British Airways was counting the cost of its huge IT failure last weekend that left 75,000 passengers stranded.
Ryanair, Europe’s largest airline by passenger numbers, has helped drive down short-haul ticket prices in Europe by increasing its capacity by 33% in the past two years.
Its cost base, widely acknowledged as the lowest of Europe’s major carriers thanks to low plane purchase, maintenance and staff costs, has allowed it to undercut rivals while still making a profit.
The Irish airline made a profit after tax of €1.3bn (£1.1bn) in the year to the end of March, even though it slashed ticket prices to fill almost 14m seats added during the period.
Chief executive Michael O’Leary said fares had fallen 13% but profitability had doubled over three years. He added: “Frankly I see no reason why that trend won’t continue.”
The airline said that in the coming year, Ryanair would slow the pace of capacity growth to around 8%, or 10m seats, and he expects ticket prices to fall by 5% to 7%.