December 1, 2023

Ryanair Annual Profit Rises 13%

Net profit rose to 569 million euros, or $734 million, in the year ending March 31, surpassing last year’s profit of 503 million euros, Ryanair said. Revenue also climbed by 13 percent, to 4.9 billion euros, as traffic increased by 5 percent to just over 79 million passengers.

While recession and austerity, combined with high fuel prices, have led Ryanair’s higher-cost rivals to retrench and cut capacity across their networks, the Dublin-based carrier has thrived, adding new routes and service in countries like Greece, Morocco and Croatia.

The airline — already Europe’s largest by passenger numbers, with a fleet of more than 300 aircraft — recently announced plans to order 175 new Boeing 737 jets worth more than $15 billion at list prices, which it expects will help fuel an expansion to more than 100 million passengers before the end of the decade.

In a statement, Michael O’Leary, the chief executive, said the strong results were ‘’testimony to the strength of Ryanair’s ultra-low-cost model,’’ and he predicted the carrier would be able to achieve a 20 percent share of the intra-European air travel market over the next five years. Ryanair’s current share of the European market is around 12 percent.

‘’Our new-route teams continue to handle more growth opportunities than our current fleet expansion allows,’’ Mr. O’Leary said, adding that Ryanair was considering adding new connections to airports in Germany, Scandinavia and Central Europe to take advantage of cutbacks at rivals like Air Berlin, SAS and LOT, the Polish flag carrier.

Analysts said the main brake on Ryanair’s growth in the short- to medium-term would be the rate at which it can bring its newly ordered jets into service.

‘’Their big constraint is that they really have no planes coming in until 2016,’’ said Stephen Furlong, an airline analyst with Davy Stockbrokers in Dublin. Provided that capacity is added incrementally, to preserve revenue per passenger, he said, ‘’I don’t see any reason why they can’t be 20 to 25 percent of the market.’’

Known for offering cheap baseline fares that it pads with added optional fees for everything from credit-card payments to assigned seats, Ryanair said its so-called ancillary revenue surged by 20 percent last year — four times the pace of its traffic growth — to just over 1 billion euros. That was more than one-fifth of total revenue.

Some of that gain, analysts said, followed the introduction last year of an optional reserved seating fee, which ranges from 10 to 20 euros one-way, depending on the route. Mr. O’Leary, in a conference call with analysts, declined to say how much revenue the new fee had generated. Roughly one-quarter of Ryanair’s seats are available only to passengers who have paid the reservation fee.

Ryanair said it expected passenger and profit growth to continue this year, albeit at a slightly slower pace as recession takes hold across a larger swath of the euro zone. The airline forecast annual traffic growth of 3 percent to 81.5 million passengers. Stubbornly high fuel costs, which now represent 45 percent of Ryanair’s total operating expenses, are expected to limit earnings to between 570 million and 600 million euros, in line with last year, the airline said.

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Alaska Airlines, Flying Above an Industry’s Troubles

But then, you have to land.

Juneau’s airport is surrounded by mountains, the approach often buffeted by treacherous wind shear. Sitka’s one small runway is on a narrow strip of land surrounded by water. And in Kodiak, the landing strip ends abruptly at a mountainside. The airport approach is so tricky that first officers are not allowed to land there; only captains are trusted to do so.

Doug Wahto knows these airports well. He grew up in Juneau, worked as a commercial fisherman and builder and started flying with Alaska Airlines in 1970. As a pilot, he honed the art of reading wind conditions by looking at how snow blew over mountain ridges.

Mr. Wahto retired six years ago, but not before seeing the transformation of flying in Alaska and of the airline where he spent his career. Alaska Airlines is puny compared to the major carriers: it has 124 planes, while United Airlines has more than 700 and four times as many passengers. But because of the state’s topography and extreme weather, it was the first to develop satellite guidance, a navigation technique that has transformed landing at Alaska’s tricky airports. The technique is now at the heart of the Federal Aviation Administration’s plan to modernize the nation’s air traffic system, a project that is expected to cost tens of billions of dollars over the coming decades.

“It doesn’t take a rocket scientist,” Mr. Wahto says, “or a crusty old dog like me to fly these approaches anymore.”

Largely because of that technology, flying in Alaska is now remarkably reliable — even in the dead of winter, when it is snowing, when there are just two hours of daylight, when runways are made slippery by ice or sleet, when winds blow at more than 50 miles an hour and pilots can barely see out the windshield. When, in other words, no one in his right mind would want to land a Boeing 737 with 140 passengers on a 6,000-foot runway.

Alaska Airlines, in fact, had the industry’s best on-time performance for the third consecutive year in 2012, with 87 percent of flights landing on time, according to FlightStats, a data provider.

That reliability means a lot in a state where air travel is often the only option, and where Alaska is the only commercial jet carrier with in-state routes. The airline flies to 16 towns accessible only by plane or boat, and, in doing so, ferries food and medical supplies, takes thousands of oil workers above the Arctic Circle and operates as the biggest air shipper for the state’s fisheries.

This role as primary transport for in the state is still a healthy business, but Alaska Airlines has prospered by expanding its services. From its Seattle base, it now has a bigger presence than other airlines along much of the West Coast. In 2007, it moved into Hawaii; its flights to the state now account for 20 percent of its available seat miles, an industry standard for measuring capacity. That is more than the 17 percent in Alaska itself.

Megamergers, most recently of US Airways and American Airlines, have redrawn the boundaries of domestic carriers, concentrating the business as never before. Alaska Airlines, for its part, has cultivated staunch independence. Unlike carriers that have faced bankruptcy or acquisition, Alaska has turned a profit for 33 of the last 39 years. In 2012, it had a record $316 million in net income, up 29 percent from 2011.

Although it started in a sparsely populated, meteorologically unwelcoming, financially challenging corner of the country, Alaska has built a successful franchise that is the envy of many rivals.

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Regulator in India Cites Safety Violations and Financial Troubles of Many Airlines

Most of the airlines in India — including Air India Express, GoAir, IndiGo, Jet Airways, Kingfisher and SpiceJet — were named in the report, which was dated Dec. 27.

The report was given to The New York Times on Monday by an airline executive, who asked to remain anonymous because the report was not public and he feared repercussions.

The report noted that the regulatory agency, the Directorate General of Civil Aviation, had been prompted to examine the airlines amid a “background of severe financial stress being faced by almost all” of the carriers.

It was signed by Lalit Gupta, head of the aircraft engineering branch of the directorate, and E. K. Bharat Bhushan, the regulatory agency’s top official. Neither official returned a call for comment on Monday.

The report found fault with almost every one of India’s airlines, although the regulator said it had yet to examine Air India’s international operations.

The concerns included a shortage of pilots at Air India Express, the state carrier’s budget airline; a shortage of engines and a spate of pilot departures at Kingfisher Airlines; a two-year delay in auditing international operations at Jet Airways; a lack of instructors for the Boeing 737 aircraft at SpiceJet; and incomplete investigations of incidents at IndiGo.

The Indian airline industry is nearing a crisis after rapid growth, analysts say. In the last seven years, according to the Center for Asia Pacific Aviation, passenger numbers have tripled, to more than 150 million last year. About $14 billion has been invested in aircraft and more than $25 billion in the whole industry in that time, but the growth in pilots, flight trainers, regulatory safety experts and maintenance engineers has not kept pace with demand, according to analysts and regulators themselves.

Stiff competition in the industry has recently driven down revenue to the point where several airlines are nearing bankruptcy, raising more safety concerns.

“The airline sector is broadly at a brink of financial disaster,” said Kapil Kaul, the South Asia chief executive at the Center for Asia Pacific Aviation. “Most of them don’t have a business case to exist, and fund-raising options have dried up.”

The Indian airline industry has lost $5 billion to $6 billion in the last five years and this year was expected to lose an additional $2 billion, he said.

While in other parts of the world, some airlines may have consolidated or shut, in India they remained in business in part because they are financed by entrepreneurs who have a personal stake in trying to make the business work, Mr. Kaul said.

“The airlines which are surviving are beyond business,” he said.

The report did not discuss direct dangers to passengers. Mr. Kaul said that if the regulator had thought passengers were at risk, it would have grounded airlines.

IndiGo, one of the few Indian airlines that is not losing money, disputed the regulator’s report, saying, among other things, that the airline had removed engines early to comply with a directive from the Federal Aviation Administration in the United States about one engine model, and that all employees were “strongly encouraged” to report any safety issues.

A spokeswoman for GoAir said that the airline had met with the regulator on Jan. 6 about the report and that the regulator had “fully accepted” GoAir’s response. “GoAir has always been committed to guarantee high safety standards and will continue to invest all the resources necessary to keep our standards at the highest level,” she said.

Jet Airways said, “All points raised by the report have been clarified and accepted by the safety department of D.G.C.A. Guest safety is of paramount importance at Jet Airways and JetLite,” a Jet subsidiary.

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U.S. Durable Goods Orders Rose in July

WASHINGTON — Orders for aircraft and autos last month drove up demand in July for long-lasting manufactured goods, the government said Wednesday. Outside of those categories, businesses invested less in factory goods. The Commerce Department reported that overall orders for durable goods rose 4 percent last month, the biggest increase since March. Demand for autos and auto parts jumped 11.5 percent, the most in eight years. Aircraft orders, a volatile category, soared 43.4 percent, after falling 24 percent in June.

Excluding transportation goods, orders rose just 0.7 percent.

Trading on Wall Street was mixed at the start of Wednesday’s session after the Commerce Department report was announced but then turned sharply positive.

A critical category that tracks business investment plans fell 1.5 percent, the biggest drop in six months. That suggests businesses are pulling back on spending. Orders in all other major categories dropped, including computers, electronic goods and machinery.

A durable good is a product that is expected to last at least three years.

Auto production is rebounding after a slowdown caused by the Japan earthquake. The Federal Reserve reported last week that factory output rose 0.6 percent in July, mostly because of an increase in auto production.

A big order by American Airlines helped raise the aircraft sector. American Airlines ordered 100 new Boeing 737 planes with fuel-efficient engines in July.

Manufacturing has been a key source of economic growth since the recession officially ended in June 2009. But it began to slump this spring, along with the broader economy.

Orders fell in April and June, partly because of supply disruptions stemming from the March 11 earthquake in Japan. And a spike in gas prices earlier this year cut into consumer spending, reducing demand for big-ticket items, like computers, appliances and furniture.

Several recent reports suggest the sector could be slowing further. A survey by the Federal Reserve Bank of Philadelphia showed that manufacturing in the mid-Atlantic region contracted in August by the most in more than two years. A Richmond Fed survey released Tuesday and a New York Fed survey last week also pointed to slowdowns in those areas, although not as severe as the Philadelphia region.

Economists predicted further weakness, even as temporary factors fade. Falling stock prices and fear of another recession may persuade consumers and businesses to hold back on big purchases. That could slow orders for industrial machinery, electronic goods and appliances.

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Rivet Manufacturing Flaw Suspected in Jet’s Roof

The National Transportation Safety Board, in an interim report, said that a laboratory examination of intact sections of the roof found that rivet holes on one layer of the plane’s skin did not line up properly with an underlying layer. The board also said that it found paint from the exterior of the plane had bled through into the inside. Experts said that suggested the aluminum skin had not been properly bound together, leading to premature damage from fatigue.

The board, as is its practice, did not draw any conclusions about the cause of the rupture, which occurred at 34,000 feet. It will not do so until research is complete and its five members receive a report from the staff, something that will probably not happen for months. But outside experts said that the 15-year-old Boeing 737 probably left the factory with flaws.

“It means the assembly was wrong, it means the wrong tools were used, it means they were careless in drilling the holes, and maybe the drill was dull,” said John J. Goglia, an aircraft maintenance expert who is a former member of the safety board.

Robert W. Mann Jr., an aviation industry expert in Port Washington, N.Y., said such flaws were unusual. “The key issue is whether this was systemic,” he said. “ Why weren’t the parts rejected?”

Boeing, in a statement, said it would not speculate about the cause of the incident but that “we remain fully engaged with the investigation.”

The safety board said it was also examining the five other Southwest planes that were found to have cracks. Those five planes and the one that ripped open all had about 40,000 cycles of takeoffs and landings. After the Southwest incident, Boeing said it did not expect that these models of 737s needed to be inspected before at least 60,000 cycles.

In an emergency order days after the incident, the Federal Aviation Administration ordered airlines flying those planes to check for cracks at 30,000 cycles.

The six planes were delivered by Boeing from 1994 to 1996. Boeing said it had completed a worldwide inspection of nearly 80 percent of 190 similar 737s and found no other problems.

An F.A.A. official involved in the investigation, who asked not to be identified because the agency had not taken a formal position, said it was too soon to know whether the agency’s inspection order would have detected bad riveting. But the official added that the results of that inspection did not show that there was any generic problem. In fact, it was possible that the Southwest airplane had a one-of-a-kind problem, the official said.

If the rivet holes on the two pieces of aluminum being fastened together did not line up right, that would mean they were egg-shaped instead of round, Mr. Goglia said. As the two pieces of metal were pulled in opposite directions when a plane is pressurized and depressurized, round holes would spread the forces evenly around the circumference of the hole. But if the hole is egg-shaped, he said, “they’re concentrated in one spot.”

The aviation industry is well acquainted with cracks developing around rivets as airplanes age. In April 1988, an Aloha Airlines plane peeled open almost like a sardine can, resulting in new inspection requirements. But that plane had 89,000 takeoffs and landings.

Hans J. Weber, owner of Tecop International, an aviation consulting firm in San Diego, said that manufacturing flaws were rare. “This is a real puzzle,” he said. “I am not fully satisfied with the explanation. The manufacturing of aluminum airplanes is very well understood.”

Mr. Mann said he was concerned about the paint. “These are not small defects that you could have wicking of the liquids,” Mr. Mann said. “Paint is not a thin substance. It is pretty substantial.”

If the parts were not the perfect shape as they came to the manufacturing plant, “that creates the necessity to redrill, which creates the ovalization,” Mr. Mann said, leading the parts to wear.

Analysts pointed out that there had been several problems in 1990s with planes that had been miswired or misassembled.

With major manufacturers like Boeing, the F.A.A. usually uses company employees to act as its designee in carrying out inspections, although it intermittently reviews their work. Mr. Mann said that in effect, “the F.A.A. designates the manufacturer as their own judge and jury.”

Matthew L. Wald reported from Washington and Jad Mouawad from New York.

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