Ash cloud impacted Ryanair profits

Profits hit

As one would expect, the volcanic ash disruption from the infamous Icelandic volcano Eyjafjallajokull had an enormous impact on aviation industry profits, even budget carriers such as Ryanair.

Releasing its first quarter net profit figures today, Ryanair reported that profits had fallen by 24 percent to $122 million due to the 10,000 flights it had been forced to cancel at a cost of almost $60 million.

Despite the impact on the company's profits, Ryanair said it was still on course to meet its profit forecasts of the year, which will see the company's figures rise by 10-15 percent.

The volcano-caused disruptions impacted all of Europe's air carriers with European airspace being shut down for days between April and May. Speaking to the BBC, Howard Miller, Ryanair's Chief Financial Officer said,"In Ryanair we had one and a half million passengers who were disrupted because of non-existent volcanic ash clouds. It was a regulatory disaster, and both passengers and airlines suffered."

Taxes and refunds

Ryanair has famously slammed the aviation authorities for how the whole incident was managed, citing the "unfair and disproportionate" EU regulations designed to compensate passengers for delays. Ryanair had said it would only refund passengers up to the value of tickets purchased, but were forced to abide by EU rules which gave wider compensation for disrupted travellers.

Ryanair also criticised the £8.50 "tourist tax" imposed by the Irish government, which it has cited as a factor in the "continuing collapse in Irish tourism".

Despite all the delays and refunds, Ryanair's Q1 profits still saw an increase, albeit of one percent, over last year.

"Despite these volcanic ash disruptions, Ryanair continues to increase traffic, yields and profits, while most of our competitors are cutting capacity and reporting losses," said Ryanair Chief Executive Michael O'Leary in a statement.

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