A rash of half-year results shows airlines are struggling to cope with the financial recession, many posting significant losses.
July 31: A rash of half-year results shows airlines are struggling to cope with the financial recession, many posting significant losses.
Kingfisher Airlines reported an INR2.43 billion ($50 million) loss in its 2009 first quarter; Alitalia posted a loss of €273 million ($385.5 million) for the half-year; Air France KLM announced a €431 million loss for its first quarter, and Singapore Airlines, recorded a S$307.1 million ($212.6 million) loss.
In contrast, Ryanair reported a €123 million ($174.6 million) net profit for its first quarter ending June 30, reversing a €90.5 million loss for the same period in 2008. However, it warns that full-year net income will be at the lower end of its forecast of €200-€300 million. “Many of our competitors are guiding increased losses and declining traffic,” said Ryanair’s Chief Executive Officer Michael O’Leary. “These quarterly results are distorted by a 42% reduction in fuel costs. Thanks to a 13% reduction in average fares, we grew traffic by 11%, which was a robust performance in a deep recession when many of our competitors were cutting flights, losing traffic and reporting increased losses.”
Meanwhile Ryanair is cutting its services at Dublin Airport by 20% in protest at the Irish Government’s introduction of a €10 ‘tourist tax’. “The high and rising costs at Dublin Airport, combined with an insanely stupid €10 tourist tax, are devastating tourism here in Ireland,” said O’Leary.