By Dongying Wang

    LONDON, June 2 (Xinhua) -- Ryanair, Europe's largest low fare airline, has emerged as Europe's biggest airline in terms of passenger numbers and market capitalization thanks to a growing number of price-sensitive customers amid the global financial crisis.

    Having overtaken major rivals like Air France, British Airways and Lufthansa, the Irish airline is expected to continue its "robust performance" as economic prospect remains uncertain.

    RISE TO EUROPE'S LEADING AIRLINE

    Ryanair announced on Tuesday a net profit of 105 million euros (some 149 million U.S. dollars) over the last financial year.

    Ryanair's CEO, Michael O'Leary, said the airline has overtaken Air France, British Airways and Lufthansa in passenger numbers and market capitalization and become Europe's largest airline.

    "Ryanair's continued fare cuts and traffic growth has seen us overtake Lufthansa's traffic figures in March 2009 to finally become Europe's largest airline by both traffic and market capitalization," said O'Leary.

    Statistics show that Ryanair's market capitalization reached 5.3 billion euros (7.5 billion dollars) on May 1, followed by 4.5 billion euros (6.4 billion dollars) of Lufthansa, 3.4 billion euros (4.8 billion dollars) of Air France and 2 billion euros (2.8billion dollars) of British Airways.

    However, due to economic recession and high oil prices, Ryanair's net profit plunged 78 percent in the last financial year ending in March 2009 compared to the 2007/2008 figures.

    Still, its performance was hailed as "robust" during a year when most airline competitors announced significant losses. Global oil prices soared to a record high of 147 dollars a barrel in last July before falling to a low of 32 dollars in December.

    As the recession continues, many airways are reporting traffic and yield decline which has led to greater losses and an accelerating trend of airline closures or consolidations.

    British Airways, Britain's leading airline operator, recorded apre-tax loss of 401 million pounds (636 million dollars) over the last year, the worst performance since its privatization two decades ago.

    LOW FARES HELPED PERFORMANCE

    "Despite the global recession and record high oil prices Ryanair's lowest fare airline services again delivered traffic growth and profitability which demonstrates the fundamental strength of the Ryanair model," said the Ryanair CEO.

    Due to the recession and a weaker British pound, Ryanair's average fares fell by 8 percent to 40 euros (57 dollars), but its traffic grew by 15 percent to 58.5 million passengers. This resulted in an 8 percent rise in its revenue last year.

    "The recession and declining consumer confidence is proving to be good for Ryanair's growth, as millions of passengers switch to our lower fares," O'Leary said, adding that all of its major competitors have reported material reductions in short-haul capacity and traffic.

    "This recession is delivering real cost benefits for Ryanair through the combination of a weaker dollar, lower interest rates, lower airport costs, and lower unit costs," he said.

    The current economic downturn is also encouraging passengers to become much more price-sensitive, which is why they are switching to Ryanair's low fares and unbeatable customer service over all other competitors, he added.

    Ryanair has pledged to continue its lower fares to stimulate traffic growth, maintain high load factors and win more short-haul traffic from high fare competitors.

    "We are determined to ensure that Europe's consumers and airports will always have real competition and a choice over high fare, fuel surcharging airlines like Air France, BA, and Lufthansa," O'Leary said.

    PROMISING OUTLOOK

    As the economic outlook remains uncertain, Ryanair expects to maintain its traffic growth by 15 percent to fly 67 million passengers during 2009/2010.

    "Significantly lower oil prices has encouraged us to restart hedging and Ryanair is now 90 percent hedged for the first three quarters of the coming year at much lower prices than competitors," said O'Leary.

    The airline forecasts that its full-year fuel bill will be 450 million euros (637 million dollars) lower if oil prices remain at current levels. Oil prices stood at about 68 dollars a barrel on Monday.

    The company also forecasts that its operating costs per passenger, excluding fuel, will fall by about 5 percent.

    These reductions in both fuel and other unit costs are expected to help Ryanair drive fares materially lower, in a bid to gain traffic from high fare competitors.

    A combination of a deep recession, weaker British pound and the airline's capacity growth will lower its average fares by 15 percent to 20 percent this year, to as little as 32 euros (45 dollars) per passenger, said the company.

    On the basis of these fuel and yield expectations, Ryanair expects that after-tax profits for the coming year will at least double to a range between 200 million euros (283 million dollars) to 300 million euros (425 million dollars), said O'Leary.

    Among its 32 bases, Dublin Airport and London Standard Airport are the two largest operational bases of the airline.

    With more than 6,000 employees, Ryanair operates on more than 830 routes across 26 countries, connecting 148 destinations.