No worries about sky high oil prices for budget carrier Ryanair, which has shattered expectations by posting an 18 percent rise in year on year profits for the first half, and is sounding confident about the rest of the year. Good summer ticket sales and more customers turning away from big airlines that are upping prices to cover fuel costs are the main reasons.
A different tale at SAS, the scandanavian carrier, which has disppointed the market forecasters by reporting a whopping 90 percent fall in quarterly profits. Europe’s fourth largest airline now expects to lose money this year. While cutting services like catering has helped some companies like Iberia to stay in the race with the no-frills competitors, SAS has not gone down that road, and the exploding price of kerosene has been the final blow. The International Air Transport Association says kerosene prices mean it is revising its projections for the industry as a whole for the year, turning an expected two billion euro profit into a four billion euro loss. It expects more carriers will go bankrupt, and this despite an 18 percent rise in passengers this year. Fuel now represents 18 percent of airline’s costs, compared to 16 percent a year ago, and airlines as mighty as United, struggling to stay airborne, may now crash.