Ryanair's profits surge 66%: did 'charm offensive' do it?

Ryanair, the Irish-based airline that practically invented budget flying in Europe, and also nearly invented the reputation of low-cost airlines as cheap but unfriendly, has hit record profits this year. While others have also done well as fuel costs have dropped, none have had the same scale of leap.

It's especially a big bounce because Ryanair, which has expanded aggressively over the years, found its profits skidding in 2013. Part of the change has been a decision to go easier on passengers with a program of reducing some charges, keeping fares and costs low, and in the words of CEO Michael O'Leary "stop unnecessarily pissing people off." That's meant allowing more baggage, reserved seats, and ending punitive charges.

It seems to have paid off. because Ryanair's load factor (percent of seats sold) has been very high, with few empty seats despite a growing fleet and route map. They expect to continue, with more planes arriving each month from a massive order of 737s (including the newest 187-passenger stretch which Ryan is getting with 200 seats). They even expect to lease planes this summer for extra capacity.

Other recent changes for Ryanair have been more flights to primary airports in Europe; Ryanair initially lowered costs by flying to "nearby" airports such as Beuvais for Paris, Bratislava for Vienna. Flying to primary airports has enabled them to reach out for more business passengers as well.

One other financial item on Ryanair's horizon: It's the largest single shareholder (29+%) of Aer Lingus. That's a remnant of a failed take-over bid. International Air Group (BA, Iberia, Vueling) is in the process of buying the company, but must first come to agreement with Ryanair. Ryanair could possibly block the deal—or take a big chunk of cash to pay down the cost of their aircraft orders.

Photo: Ryanair