O’Leary denies profiteering charges


Ryanair has been forced to defend claims it was profiteering today after the airline revealed it was hiking baggage charges just for the peak holiday period of July and August
In a move that will be seen as a cynical cash grab to take advantage of holidaymakers, the fee to check in a bag will rise by a third in the peak months before prices drop again in September.

Customers will have to pay £20 for their first checked-in bag, up from £15, and £50 for their second bag – doubled from £25.
Passenger misery was compounded further after it was revealed the airline’s controversial boss Michael O’Leary’s would receive a massive payout of £16.7million after returning the airline to profit.

The outspoken airline boss, who owns four per cent of shares in the airline, receives the windfall as part of a £422m dividend for shareholders.

But Mr O’Leary denied he was ‘profiteering’ and insisted it was a move to discourage passengers from carrying unnecessary amounts of baggage for short breaks.

Ryanair has recently launched a luggage line that will comply with the airline’s carry-on luggage restrictions.

The airline levels a £35 charge if bags do not comply with size rules and need to be checked in at the airport.

Ryanair said that it used its charges to change customer behaviour and insisted that the numbers checking in baggage had fallen dramatically as fees had been increased.

The budget carrier, which was embroiled in controversy last month after initially refusing to refund travellers caught up in the volcano crisis, announced pre-tax profits of £281million for the year to March 31, against a loss of £150.5m a year earlier.

The carrieris often criticised for billing itself as a low fares airline while charging customers to check in luggage, for online check-in, for onboard snacks and for credit card payments. Last month it announced plans to charge £1 for passengers to use the on-board toilet.

Today it said revenues from sales of these non-ticket items rose 11 per cent to £560.7m and now account for 22 per cent of overall sales.

The airline grew traffic 14 per cent to 67m passengers while fuel costs fell 29 per cent to £755.5m thanks to lower oil prices.

The firm said it was ‘proud’ of its performance and expected further double-digit growth in traffic and profit this year – barring any more disruption from Iceland’s volcanic ash cloud.

Ryanair said ‘repeated, unnecessary closures’ of European airspace had left it with a bill of around £42.3 million so far.

The firm – which lost 1.5 million passengers during the disruption in April and May – also hit out at ‘unfair and disproportionate’ regulations leaving airlines with hefty bills to compensate stranded customers.

Ryanair backed down over initial plans to limit payouts to the cost of ticket prices but warned that passengers ‘cannot and should not expect to receive unlimited compensation or reimbursements’.

The airline said it achieved the results despite a collapsing Irish tourism industry and attacked the country’s government for its introduction of a £8.50 tourist tax and cost increases of up to 40 per cent at Dublin airport.

The firm opened 280 new routes and eight new bases last year, with destinations such as Faro in Portugal and Malaga in Spain already producing higher summer fares.

The £422 million special dividend was announced today after talks with Boeing over new aircraft orders ended last December.

The move contrasts with the public row over dividends at budget rival easyJet, where founder and major shareholder Sir Stelios Haji-Ioannou quit the board last month.

Sir Stelios disagrees with the airline’s strategy of ‘relentless growth’ through the recession – believing that profit margins and dividends should be a higher priority – but the board is pressing on with plans to grow its aircraft fleet.