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Ryanair’s claims earlier this year that the airline’s introduction of baggage
charges would have no impact on its revenues have today been revealed to be
premature. In announcing record profits of 115.7 million euro (£79.6
million) for the three months up to the end of June, up 80 per cent on last
year’s figures, the airline’s chief executive Michael O’Leary said that
“initial impact of our bagging pricing initiative” had been one of the
contributors to the impressive figures.
Ryanair introduced its new baggage policy on March 16. Since then, the
carrier’s passengers have had to pay £5 per item of checked-in luggage, or
£2.50 per item if booked in advance on the airline’s website. In an attempt
to sweeten passenger reaction to the changes, the airline increased its
checked-in baggage allowance from 15kg to 20kg. It also said it reduce all
fares by 9 per cent (£2.50 or 3.50 euro).
In fact, today's results show that Ryanair’s average fare has increased from
41 (£28) to 46 euro (£31), a rise of 13 per cent. At the time the new policy
was introduced, the airline said: “This 9% across the board reduction in
Ryanair’s ticket prices from March 16 will make these changes revenue
neutral for Ryanair. The airline estimates that the reduction in ticket
revenues and excess baggage fees will cost Ryanair more than £100m per
annum.”
Despite O’Leary’s statement, Ryanair spokesman Peter Sherrard told Times
Online today that baggage fees had little impact on the airline’s
performance during this quarter. “If, as we expect, average yields
(including baggage charges) increase by 1% to 2% during the 2nd quarter, and
then fall by between 5% and 10% during the second half of this fiscal year
then our prediction that the baggage fees will be revenue neutral over the
full year will have proven correct.”
Simon Evans, chief executive of aviation watchdog the Air Transport Users
Council, said: “When Michael O’Leary said those things at the time we were
sceptical about the claims. This is an airline that is in business to make
money. When conditions are good, you expect them to get more money from
their passengers.”
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