Ryanair reports a rare fall in annual profit, but aims for rapid rebound and goes in search of yield

In FY2014, Ryanair reported its first dip in profit since FY2009's oil price spike. Fares fell for the first time in four years, but total revenue per passenger held stable thanks to ancillaries, which were helped by the introduction of allocated seating. However, higher euro-denominated fuel prices contributed to higher total cost per passenger, leading to the fall in profit.

Ryanair expects the balance of these trends to be more favourable in FY2015, when it anticipates a return to profit growth. This year will see some cost increases in connection with its move into more primary airports, such as Rome Fiumicino and Brussels Zaventem, and higher marketing costs related to its new customer service and distribution initiatives. These include family discounts and a new business traveller product, website improvements and GDS distribution.

Ryanair has the lowest unit costs and unit revenues in Europe and, although both may increase as a result of its revised strategic emphasis on higher yielding airports and market segments, it should be able to retain both of these advantages.