As filed with the United States Securities and Exchange Commission on July 31, 200820, 2010

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 20-F

OR

For the Fiscal Year Ended: March 31, 20082010

OR

OR

Date of event requiring this shell company report:                    

For the transition period from            to            

Commission file number: 0-29304

Ryanair Holdings plc

(Exact name of registrant as specified in its charter)

Ryanair Holdings plc

(Translation of registrant’s name into English)

Republic of Ireland

(Jurisdiction of incorporation or organization)

c/o Ryanair Limited

Corporate Head Office

Dublin Airport

County Dublin, Ireland

(Address of principal executive offices)

Please see “Item 4. Information on the Company” herein.

(Name, Telephone, E-mailtelephone, e-mail and/or Facsimilefacsimile number and Addressaddress of Company Contact Person)company contact person)

Securities registered or to be registered pursuant to Section 12(b) of the Act.

Securities registered or to be registered pursuant to Section 12(g) of the Act:None

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:None

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.

1,490,804,6711,478,935,935 Ordinary Shares

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes  x    No  ¨

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

Yes  ¨    No  x

Note – Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under those Sections.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes  ¨    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer  x    Accelerated filer  ¨    Non-accelerated filer  ¨

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

U.S. GAAP  ¨    International Financial Reporting Standards as issued by the International Accounting Standards Board  x    Other  ¨

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement itemItem the registrant has elected to follow

Item 17¨    Item 18¨

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes  ¨    No  x

(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.

Yes  ¨    No  ¨

TABLE OF CONTENTS

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iiiii

Presentation of Financial and Certain Other Information

As used herein, the term “Ryanair Holdings” refers to Ryanair Holdings plc. The term the “Company” refers to Ryanair Holdings or Ryanair Holdings together with its consolidated subsidiaries.subsidiaries, as the context requires. The terms “Ryanair Limited” andterm “Ryanair” referrefers to Ryanair Limited, a wholly-ownedwholly owned subsidiary of Ryanair Holdings, together with its consolidated subsidiaries.subsidiaries, unless the context requires otherwise. The term “fiscal year” refers to the 12-month period ended on March 31 of the quoted year. All references to “Ireland” herein are references to the Republic of Ireland. All references to the “U.K.” herein are references to the United Kingdom and all references to the “United States” or “U.S.” herein are references to the United States of America. References to “U.S. dollars,” “dollars,” “$” or “U.S. cents” are to the currency of the United States, references to “U.K. poundspound sterling,” “sterling”“U.K. £” and “U.K.£“£” are to the currency of the U.K. and references to “€,” “euro”“euro,” “euros” and “euro cents”cent” are to the euro, the common currency of fifteensixteen member states of the European Union (the “EU”), including Ireland. Various amounts and percentages set out in this annual report on Form 20-F have been rounded and accordingly may not total.

The Company owns or otherwise has rights to the trademark Ryanair^® in certain jurisdictions. See “Item 4. Information on the Company—Trademarks.” This report also makes reference to trade names and trademarks of companies other than the Company.

The Company publishes its annual and interim consolidated financial statements in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (“IASB”). Additionally, in accordance with its legal obligation to comply with the International Accounting Standards Regulation (EC 1606 (2002)), which applies throughout the EU, the consolidated financial statements are also prepared in accordanceof the Company must comply with International Financial Reporting Standards as adopted by the EU. Accordingly, the Company’s consolidated financial statements and the selected IFRS financial data included herein comply with International Financial Reporting Standards as issued by the IASB and also International Financial Reporting Standards as adopted by the EU, in each case as in effect for the year ended and as at March 31, 20082010 (collectively referred to as “IFRS” throughout). Prior to April 1, 2005, the Company prepared its financial statements in accordance with Irish generally accepted accounting principles (“Irish GAAP”). The Company’s financial information as of and for the year ended March 31, 2005 contained herein has been restated in IFRS. The Company has not restated its financial information as of any date or for any period prior to March 31, 2005 in IFRS and, accordingly, no such earlier IFRS financial information is contained herein.

The Company publishes its consolidated financial statements in euro. Solely for the convenience of the reader, this report contains translations of certain euro amounts into U.S. dollars at specified rates. These translations should not be construed as representations that the converted amounts actually represent such U.S. dollar amounts or could be converted into U.S. dollars at the rates indicated or at any other rate. Unless otherwise indicated, such U.S. dollar amounts have been translated from euro at a rate of €1.00=$1.5812,1.3526, or $1.00= €0.6324,€0.7393, the Noon Buying Rate in New York City for cable transfers in euro as certified for customs purposesofficial rate published by the U.S. Federal Reserve Bank of New YorkBoard in its weekly “H.10” release (the “Noon Buying“Federal Reserve Rate”) on March 31, 2008.2010. The Noon BuyingFederal Reserve Rate for euro on July 30, 200816, 2010 was €1.00=$1.55891.2919 or $1.00=€0.6414.0.7740. See “Item 3. Key Information—Exchange Rates” for information regarding historical rates of exchange relevant to the Company, and “Item 5. Operating and Financial Review and Prospects” and “Item 11. Quantitative and Qualitative Disclosure About Market Risk” for a discussion of the effects of changes in exchange rates on the Company.

In prior years, the SEC required Ryanair Holdings to reconcile net income and shareholders’ equity from its Irish GAAP or IFRS financial statements to generally accepted accounting principles in the United States (“U.S. GAAP”) and to present certain supplemental disclosures in accordance with U.S. GAAP. The SEC no longer imposes this requirement with respect to financial statements prepared in accordance with the International Financial Reporting Standards published by the IASB, and, accordingly, no U.S. GAAP financial information is provided below as of March 31, 2008 or for the year then ended.

iviii

Cautionary Statement Regarding Forward-Looking Information

Except for the historical statements and discussions contained herein, statements contained in this report constitute “forward-looking statements” within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements may include words such as “expect,” “estimate,” “project,” “anticipate,” “should,” “intend”“intend,” and similar expressions or variations on such expressions. Any filing made by the Company with the U.S. Securities and Exchange Commission (the “SEC”) may include forward-looking statements. In addition, other written or oral statements which constitute forward-looking statements have been made and may in the future be made by or on behalf of the Company, including statements concerning its future operating and financial performance, the Company’s share of new and existing markets, general industry and economic trends and the Company’s performance relative thereto and the Company’s expectations as to requirements for capital expenditures and regulatory matters. The Company’s business is to provide a low-fares airline service in Europe, and its outlook is predominately based on its interpretation of what it considers to be the key economic factors affecting that business and the European economy. Forward-looking statements with regard to the Company’s business rely on a number of assumptions concerning future events and are subject to a number of uncertainties and other factors, many of which are outside the Company’s control, that could cause actual results to differ materially from such statements. It is not reasonably possible to itemize all of the many factors and specific events that could affect the outlook and results of an airline operating in the European economy. Among the factors that are subject to change and could significantly impact Ryanair’s expected results are the airline pricing environment, fuel costs, competition from new and existing carriers, market prices for replacement aircraft and aircraft maintenance services, aircraft availability, costs associated with environmental, safety and security measures, terrorist attacks, actions of the Irish, U.K., EU and other governments and their respective regulatory agencies, fluctuations in currency exchange rates and interest rates, airport handling and access charges, litigation, labor relations, the economic environment of the airline industry, the general economic environment in Ireland, the U.K. and elsewhere in Europe, the general willingness of passengers to travel, the value of its equity stake in Aer Lingus Group plc (“Aer Lingus”), flight interruptions caused by volcanic ash emissions or other atmospheric disruptions, and other factors discussed herein. The Company disclaims any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

viv

PART I

Not applicable.

Not applicable.

THE COMPANY

Ryanair operates a low-fares, scheduled passenger airline serving short-haul, point-to-point routes in Europe and Morocco from its bases atin Dublin, London (Stansted and Luton), Glasgow (Prestwick), Brussels (Charleroi), Frankfurt (Hahn), Milan (Bergamo), Stockholm (Skvasta), Rome (Ciampino), Barcelona (Girona), Nottingham East Midlands, Liverpool, Shannon, Pisa, Cork, Marseille, Madrid, Bremen, Dusseldorf (Weeze), Bristol, Alicante, Valencia, Belfast, Bournemouth, Birmingham, Kerry, Edinburgh, Reus, Alghero, Cagliari, Trapani, Bologna, Pescara, Oporto, Bari, Brindisi, Leeds Bradford, Faro, Oslo (Rygge), Malaga, Kaunas and BirminghamMalta airports, which together are referred to as “Ryanair’s bases of operations” or “Ryanair’s bases.” The Bournemouth and Birmingham bases were opened in April 2008, and Ryanair plans to open a new base at Kerry in July 2008,Barcelona (El Prat) in September 2010 and bases at Edinburgh and Reusa further new base in the fall of 2008.Valencia in November 2010. Ryanair pioneered the low-fares operating model in Europe in the early 1990s.As1990s. As of June 30, 2008,2010, the Company offered over 1,100approximately 1,300 scheduled short-haul flights per day serving 147 locations155 airports throughout Europe and Morocco, including 26 locations in the U.K. and Ireland, with an operating fleet of 166250 aircraft flying approximately 7121,100 routes. The Company also holds a 29.8% interest in Aer Lingus, which it has acquired through market purchases following Aer Lingus’ partial privatization in 2006. The European Commission has prevented Ryanair from acquiring a majority stake in Aer Lingus pursuantand Ryanair filed an appeal with the European Court of First Instance (“CFI”). On July 6, 2010, the Court upheld the Commission’s decision. Ryanair has two months and 10 days from such date to a decision that the Company is in the process of appealing.appeal this judgment. For additional information, see “Item 8. Financial Information—Other Financial Information—Legal Proceedings—Aer Lingus Merger Decision.”

A detailed description of the Company’s business can be found in “Item 4. Information on the Company.”

SELECTED FINANCIAL DATA

The following tables set forth certain of the Company’s selected consolidated financial information as of and for the periods indicated, andpresented in accordance with IFRS. This information should be read in conjunction with (a)with: (i) the audited consolidated financial statements of the Company and related notes thereto included in Item 1818; and (b)(ii) “Item 5. Operating and Financial Review and Prospects.”

In prior years, the SEC required Ryanair Holdings to reconcile net income and shareholders’ equity from its Irish GAAP or IFRS financial statements to U.S. GAAP, and to present certain supplemental disclosures in accordance with U.S. GAAP. The SEC no longer imposes this requirement with respect to financial statements prepared in accordance with the International Financial Reporting Standards published by the IASB, and, accordingly, no U.S. GAAP financial information is provided below as of March 31, 2008 or for the year then ended.

Selected Financial Data Presented in IFRS

Profit and Loss Account Data:

Balance Sheet Data:

Cash FlowIncome Statement Data:

Selected Financial Data Presented in US. GAAP

Profit and Loss Account Data:

Balance Sheet Data:

Cash Flow Statement Data:

EXCHANGE RATES

The following table sets forth, for the periods indicated, certain information concerning the exchange rate betweenbetween: (i) the U.S. dollar and the euro,euro; (ii) the U.K. pound sterling and the euro,euro; and (iii) the U.K. pound sterling and the U.S. dollar. Such rates are provided solely for the convenience of the reader and are not necessarily the rates used by the Company in the preparation of its consolidated financial statements included in Item 18. No representation is made that any of such currencies could have been, or could be, converted into any other of the other such currencycurrencies at such rates or at any other rate.

U.S. dollars per €1.00(a)

U.K. pounds sterling per €1.00(c)

U.K. pounds sterling per U.S.$1.00(d)

As of July 30, 2008,16, 2010, the exchange rate between the U.S. dollar and the euro was €1.00=$1.5589,1.2919, or €1.00=$0.6414;$1.00=€0.7740; the exchange rate between the U.K. pound sterling and the euro was U.K.£1.00= £1.00=€1.2714,1.1834, or €1.00=U.K.£0.7865; £0.8449; and the exchange rate between the U.K. pound sterling and the U.S. dollar was U.K.£1.00= £1.00=$1.9802,1.5289, or $1.00=U.K.£0.5050. £0.6541. For a discussion of the impact of exchange rate fluctuations on the Company’s results of operations, see “Item 11. Quantitative and Qualitative Disclosures About Market Risk.”

SELECTED OPERATING AND OTHER DATA

The following tables set forth certain operating data of Ryanair for each of the fiscal years shown. Such data are derived from the Company’s consolidated financial statements prepared in accordance with IFRS and certain other data, and are not audited. For definitions of the terms used in this table, see the Glossary in Appendix A.

Operating Data:

Other Data:

RISK FACTORS

Risks Related to the Company

Changes in Fuel Costs and Fuel Availability Affect the Company’s Results and Increase the Likelihood thatof Adverse Impact to the Company May Incur LossesCompany’s Profitability. Jet fuel costs are subject to wide fluctuations as a result of many economic and political factors and events occurring throughout the world that Ryanair can neither control nor accurately predict, including increases in demand, sudden disruptions in supply and other concerns about global supply, as well as market speculation. FuelFor example, although they declined in the 2010 fiscal year, oil prices increased substantially in fiscal years 2008 and 2007 and are currently at or near historical highs, which will have2009, peaking in July 2008. These increases had a significant impact on Ryanair’s costs, and in turn, on its operating results.financial results—contributing to the net loss recorded in the 2009 fiscal year, which reflected, among other things, a 59% increase in fuel costs between fiscal year 2008 and fiscal year 2009. As international prices for jet fuel are denominated in U.S. dollars, Ryanair’s fuel costs are also subject to certain exchange rate risks. Substantial price increases, adverse exchange rates, or the unavailability of adequate supplies, including, without limitation, any such events resulting from prolonged hostilities in the Middle East or other oil-producing regions or the suspension of production by any significant producer, could have a material adverse effect onmay adversely affect Ryanair’s profitability. In the event of a fuel shortage resulting from a disruption of oil imports or otherwise, additional increases in fuel prices or a curtailment of scheduled services could result.

While Ryanair has historically entered into arrangements providing for substantial protection against fluctuations in fuel prices, generally through forward contracts covering 12-18periods of up to 18 months of anticipated jet fuel requirements,requirements. Ryanair (like many other airlines) has, in more recent periods, entered into such hedging arrangements on a much more selective basis. Nonetheless, in lightAs of the oil price spike of 2008, Ryanair has significantly increased its hedging for the period from September to December 2008. At July 25, 2008,19, 2010, Ryanair had entered into forward jet fuel (jet kerosene) contracts covering approximately 90% of its estimated requirements for September 2008,the fiscal year ending March 31, 2011 at prices equivalent to approximately $129$730 per barrelmetric ton. In addition, as of Brent crude oil, and 80%July 19, 2010, Ryanair had entered into forward jet fuel (jet kerosene) contracts covering approximately 90% of its estimated requirements for the period from October 2008 through December 2008April 2011 to September 2011 at prices equivalent to approximately $124$755 per barrel. Ryanair has not otherwise entered into material agreements to seek to fixmetric ton. Because of the pricelimited nature of a material quantity of fuel, including for periods beyond December 2008, andits hedging program, the Company may be significantlyis exposed to risks arising from fluctuations in the price of fuel, especially in light of the recent significant increases. Depending on oil price movements over the coming weeks, the Company expects to hedge its fuel requirements for the fourth quarter of its 2009 fiscal year. The Company’s outlook for the current fiscal year, to March 2009, remains entirely dependent on fuel prices. If average fuel pricesvolatility. Any new increase in the 2009 fiscal year remain at or near current levels, the Company will incur losses, which may be significant, unless it is able to offset the negative impact of fuel prices by increasing fares above their current levels. Given the generally deteriorating economic environment in Ireland, the United Kingdom, and elsewhere in Europe, as well as the Company’s significant expansion plans, which will tend to have a negative impact on yields, the Company does not expect to be able to implement such fare increases in the near term and, in fact, the Company currently intends to respond to high fuel costs and the threat of recession by reducing fares. The combination of declining fares and increased fuel costs is likely tocould have a material adverse effect on the Company’s financial condition and results of operations. Even ifIn addition, the average oil price (for Brent crude oil) is $130recent strengthening of the U.S. dollar against the euro could have an adverse effect on the cost of buying fuel in euro. As of July 19, 2010, Ryanair had hedged 88% of its forecasted fuel-related dollar purchases against the euro at a rate of $1.38 per barrel ineuro for the 2009 fiscal year, the Company’s management currently estimates that, if the euro-U.S. dollar exchange rate remains at or near the Julyperiod to 30 2008 level of €1.00=$1.5589, the Company will, at best, break even, and is likely to incur significant losses.June 2011, without, however, having entered into material hedging arrangements thereafter. See “—The Company May Not Be Successful in Raising Fares to Offset Increased Business Costs” below.

No assurances whatsoever can be given about trends in fuel prices, and average fuel prices for the 2011 fiscal year or for future years may be significantly higher than current prices. Every $1Management estimates that every $1.00 movement in the price of a barrelmetric ton of Brent crude oiljet fuel will impact Ryanair’s net income by approximately €4€2.1 million, taking into account Ryanair’s hedging program for the 2011 fiscal year ended March 31, 2009.year. There can be no assurance, however, in this regard, and the impact of fuel prices on Ryanair’s operating results may be even more pronounced. There also cannot be any assurance that Ryanair’s current or any future arrangements will be adequate to protect Ryanair from further increases in the price of fuel or that Ryanair will not incur losses due to high fuel prices alone or in combination with other factors, or that fuel prices will ever decline from their current high levels.factors. See “Item 11. Quantitative and Qualitative Disclosures About Market Risk—Fuel Price Exposure and Hedging.” Because of Ryanair’s low fares and its no-fuel-surcharges policy, as well as the Company’s significant expansion plans, which will tend to have a negative impact on yields, its ability to pass on increased fuel costs to passengers through increased fares or otherwise is somewhat limited. Moreover, the anticipated expansion of Ryanair’s fleet will result in an increase, in absolute terms, in Ryanair’s aggregate fuel costs.

Based upon Ryanair’s fuel consumption for the 20082010 fiscal year, a change of one U.S. cent$1.00 in the average annual price per gallonmetric ton of aviationjet fuel would have caused a change of approximately €3.6€0.9 million in the Company’s annual fuel costs (or a change of approximately €10 million for each $1.00 change in the price of one barrel of Brent crude oil).costs. Ryanair’s fuel costs in the 20082010 fiscal year, after giving effect to the Company’s fuel hedging activities, increaseddecreased by 14.1% over29% from the comparable period ended March 31, 2007,2009, to €791.3€893.9 million, primarily due to an increase in the number of sectors flown and the average sector length as a result of the

expansion of Ryanair’s fleet and route network, offset in part by the positive impact on fuel costs of the strengthening of the euro against the dollar and asignificant decrease in the average hedged pricecost of jet fuel. Ryanair estimates that its fuel costcosts would have been approximately €915.8€916.6 million in the 20082010 fiscal year, as compared to €688.7€1,154.5 million in the 20072009 fiscal year, had Ryanair not had any fuel hedging arrangements in place in the 2008either fiscal year.

Ryanair Has Decided to Freeze its Development in the U.K. Market and Curtail Certain U.K. Operations. Ryanair informed its U.K.-based pilots on June 16, 2009 that it had completed a review of its U.K. growth plans. The review was prompted by the recessionary environment in the U.K. and the impact it had had on Ryanair’s business, coupled with the negative impact of the U.K.’s then £10 Air Passenger Duty (“APD”), described in

more detail below. As a secondary issue, Ryanair also noted that the campaign conducted by the British Airline Pilots Association (“BALPA”) for union recognition had made Ryanair’s position in the U.K. more uncertain. See “—Risks Related to the Airline Industry—The Airline Industry Is Particularly Sensitive to Changes in Economic Conditions; A Continued Recessionary Environment Would Negatively Impact Ryanair’s Result of Operations” below.

As a result of the review, Ryanair announced its decision to temporarily freeze overall growth at its existing U.K. bases from June 16, 2009 onwards. However, the Company may selectively increase capacity at some U.K. airports where opportunities arise such as its launch of a new base at Leeds Bradford. Any changes in the announced policy will be dependent upon the recovery of the U.K. economy, the status of the U.K.’s APD tourist tax and any other relevant factors (such as airport growth incentives). Furthermore, Ryanair announced on July 21, 2009 that, as a result of the U.K. government’s £10 APD tourist tax (as well as the then scheduled increase in APD from £10 to £11, which occurred in November 2009) and the high costs of operating at its London (Stansted) base, it would implement a 40% reduction in capacity at such base between October 2009 and March 2010. In particular, the Company announced its intention to reduce its London (Stansted)-based aircraft from the then current 40 to 24 during the aforementioned period, and also reduce by 30% the number of weekly Ryanair flights to and from the airport. The Company announced at that time that it expected these cuts to result in 2.5 million fewer passenger trips during the period. In addition, on June 29, 2010, due to the continuance of the U.K. government’s £11 APD tourist tax and high charges at London (Stansted) airport, the Company announced that capacity at London (Stansted) airport would be reduced from winter 2010 by 17% and the number of aircraft based at London (Stansted) would be reduced from 24 to 22. Ryanair also noted that, as a result of other capacity reductions at its U.K. bases except for the bases at Edinburgh and Leeds Bradford, its total U.K. capacity would fall by 16% in the period from November 1, 2010 to March 31, 2011.

The decision to freeze the Company’s development in the U.K. and reduce flights to and from London (Stansted) has presented some risks. In the past, the Company’s growth has been largely dependent on flights to or from the U.K. Such flights represented 24.1% of total flights in the 2010 fiscal year. A weak U.K. economy, along with the Company’s decision to freeze growth at its U.K. bases (with the exception of launching a base at Leeds Bradford), and reduce its London (Stansted) flights, may affect the overall growth of the Company. In addition, the abovementioned measures affecting U.K.-based pilots may affect the Company’s labor relations. Such risks could lead to negative effects on the Company’s financial condition and/or results of operations.

The Company May Not Be Successful in Raising FaresReducing Business Costs to Offset Increased Business Costs.Reduced Fares.Ryanair operates a low-fares airline. The success of its business model depends on its ability to control costs so as to deliver low fares while at the same time earning a profit. However, the company currently faces an environment of weakening economic demandThe Company has limited control over its fuel costs and high jet fuelalready has comparatively low other operating costs. In this environment, Ryanair will be ableperiods of high fuel costs, if the Company is unable to generatefurther reduce its other operating costs, operating profits only if it is ableare likely to increasefall. The Company cannot offer any assurances regarding its fares. However, the Company’s significant expansion plans may have a negative impact on yields, and, moreover, (i) it faces price competition from other airlines; and (ii) its passengers expect to pay low fares for its no-frills service.future profitability. See “—The Company Faces Significant Price and Other Pressures in a Highly Competitive Environment” below.below and “—Changes in Fuel Costs and Fuel Availability Affect the Company’s Results and Increase the Likelihood that the Company May Incur Additional Losses” above.

The Company is Subject to Legal Proceedings Alleging State Aid at Certain Airports. In December 2002, the European Commission announced the launch of an investigation into the 2001 agreement between Ryanair and Brussels (Charleroi) airport and the airport’s owner, the government of the Walloon Region of Belgium. The agreement enabled the Company to launch new routes and base up to four aircraft at Brussels (Charleroi).

In February 2004, the European Commission found that a portion of the arrangements between Ryanair, the airport, and the region constituted illegal state aid, and therefore ordered Ryanair to repay the amount of the benefit received in connection with those arrangements. In May 2004, Ryanair appealed the decision of the European Commission to the European Court of First Instance (“CFI”), requesting that the decision be annulled. The CFI heard Ryanair’s appeal in March 2008. In December 2008, the CFI annulled the European Commission’s decision and Ryanair was repaid the €4 million that the Commission had claimed was illegal state aid. Subsequently, the Walloon Region withdrew a separate action for €2.3 million against the Company.

Between July 2007 and March 2008, the European Commission launched formal investigations into Ryanair’s agreements with the Lübeck, Schönefeld, Tampere, Alghero, Pau, Aarhus and Bratislava airports. These investigations are ongoing, with the exception of the Bratislava airport case, which concluded in January 2010 with a finding that the agreement was in full compliance with state-aid rules.

On June 17, 2008, the European Commission launched a further investigation into Ryanair’s agreements at Frankfurt (Hahn) airport, which is a significant base for Ryanair. The European Commission announced in a public statement that its initial investigation had found that the airport might have acted like a private market investor but that it had insufficient evidence to reach a conclusion and therefore had elected to open a formal investigation. The formal investigation is ongoing.

Ryanair believes that the positive decision by the CFI in the Charleroi case has caused the Commission to rethink its policy in this area. However, adverse rulings in the Frankfurt (Hahn) or similar cases could be used as precedents by competitors to challenge Ryanair’s agreements with other publicly owned airports and could cause Ryanair to strongly reconsider its growth strategy in relation to public or state-owned airports across Europe. This could in turn lead to a scaling-back of Ryanair’s overall growth strategy due to the smaller number of privately owned airports available for development. No assurance can be given as to the outcome of legal proceedings, nor as to whether any unfavorable outcomes may, individually or in the aggregate, have a material adverse effect on the results of operation or financial condition of the Company. For additional information, please see “Item 8. Financial Information—Other Financial Information—Legal Proceedings.”

The Company Faces Significant Price and Other Pressures in a Highly Competitive Environment. Ryanair operates in a highly competitive marketplace, with a number of low-fare, traditional and charter airlines competing throughout the route network. Airlines compete primarily with respect to fare levels, frequency and dependability of service, name recognition, passenger amenities (such as access to frequent flyer programs), and the availability and convenience of other passenger services. Unlike Ryanair, certain of Ryanair’s competitors are state-owned or state-controlled flag carriers and in some cases may have greater name recognition and resources and may have received, or may receive in the future, significant amounts of subsidies and other state aid from their respective governments. In addition, the EU-U.S. Open Skies Agreement, which was signed in April 2007 and entered into effect in March 2008, allows U.S. carriers to offer services in the intra-EU market, which should eventually result in increased competition. See “Item 4. Information on the Company—Government Regulation—Liberalization of the EU Air Transportation Market.”

The airline industry is highly susceptible to price discounting, in part because airlines incur very low marginal costs for providing service to passengers occupying otherwise unsold seats. Both low-fare and traditional airlines sometimes offer low fares in direct competition with Ryanair across its route network as a result of the liberalization of the EU air transport market and greater public acceptance of the low-fares model. Increased price competition and the resulting lower fares, combined with continuous increases in the Company’s capacity in recent years (including an increase of approximately 12% during the 2010 fiscal year), have combined to put downward pressure on the Company’s yields. Ryanair’s Yield per Available Seat Mile (“YASM”) decreased by 7.6% in the 2009 fiscal year and decreased further by 12.6% in the 2010 fiscal year.

Although Ryanair intends to compete vigorously and to assert its rights against any predatory pricing or other conduct, price competition among airlines could reduce the level of fares or passenger traffic on the Company’s routes to the point where profitability may not be achievable.

In addition to traditional competition among airline companies and charter operators who have entered the low-fares market, the industry also faces competition from ground transportation (including high-speed rail systems) and sea transportation alternatives, as businesses and recreational travelers seek substitutes for air travel.

The Company Will Incur Significant Costs Acquiring New Aircraft and Any Instability in the Credit and Capital Markets Could Negatively Impact Ryanair’s Ability to Obtain Financing on Acceptable Terms. Ryanair’s continued growth is dependent upon its ability to acquire additional aircraft to meet additional capacity needs and to replace older aircraft.

Ryanair expects to have 272 aircraft in its fleet by March 31, 2011. With the Company’s current orders for aircraft it is obligated to buy (i.e., “firm” orders) under its contracts with The Boeing Company (“Boeing”), the Company expects to increase the size of its fleet to as many as 299 Boeing 737-800 aircraft by March 2013 (assuming that planned disposals of aircraft and returns of leased aircraft are completed on schedule). For additional information on the Company’s aircraft fleet and expansion plans, see “Item 4. Information on the Company—Aircraft” and “Item 5. Operating and Financial Review and Prospects—Liquidity and Capital Resources.” There can be no assurance that this planned expansion will not outpace the growth of passenger traffic on Ryanair’s routes or that traffic growth will not prove to be greater than the expanded fleet can accommodate. In either case, such developments could have a material adverse effect on the Company’s business, results of operations, and financial condition.

Ryanair plans to finance its purchases of firm-order aircraft through a combination of bank loans, operating and finance leases—including via sale-and-leaseback transactions—and cash flow generated from the Company’s operations. As in the past, Ryanair expects a majority of its financing to be supported by guarantees granted by the Export-Import Bank of the United States (“Ex-Im Bank”). Nonetheless, due to the general deterioration in the availability of bank credit facilities in recent years, no assurance can be given that sufficient financing will be available to Ryanair or that the terms of any such financing will be favorable. Any inability of the Company to obtain financing for new aircraft on reasonable terms could have a material adverse effect on its business, results of operations, and financial condition.

In addition, the financing of new and existing Boeing 737-800 aircraft has already and will continue to significantly increase the total amount of the Company’s outstanding debt and the payments it is obliged to make to service such debt. Furthermore, Ryanair’s ability to draw down funds under its existing bank-loan facilities to pay for aircraft as they are delivered is subject to various conditions imposed by the counterparties to such bank loan facilities and related loan guarantees, and any future financing is expected to be subject to similar conditions. The Company currently has arranged or drawn down financing for all 16 aircraft to be delivered in the period between the date hereof and January 2011 through Ex-Im Bank-supported finance leases (five of such aircraft remain subject to the issuance of preliminary credit guarantees by Ex-Im Bank). For additional details on Ryanair’s financings, see “Item 5. Operating and Financial Review and Prospects—Liquidity and Capital Resources.”

Ryanair has also entered into significant derivative transactions intended to hedge its current aircraft acquisition-related debt obligations. These derivative transactions expose Ryanair to certain risks and could have adverse effects on its results of operations and financial condition. See “Item 11. Quantitative and Qualitative Disclosures About Market Risk.”

The Company’s Rapid Growth May Expose It to Risks.Ryanair’s operations have grown rapidly since it pioneered the low-fares operating model in Europe in the early 1990s. See “Item 5. Operating and Financial Review and Prospects—History.” During the 2010 fiscal year, Ryanair announced 356 new routes originating from Belgium, France, Germany, Ireland, Italy, Lithuania, Malta, Norway, Portugal, Slovakia, Spain, Sweden and the U.K. Ryanair intends to continue to expand its fleet and add new destinations and additional flights, which are expected to increase Ryanair’s booked passenger volumes in the 2011 fiscal year to approximately 73.5 million passengers (prior to any reduction in passengers arising from the volcanic ash-related flight cancellations), an increase of approximately 11% over the approximately 66.5 million passengers booked in the 2010 fiscal year. However, no assurance can be given that this target will in fact be met. If growth in passenger traffic and Ryanair’s revenues do not keep pace with the planned expansion of its fleet, Ryanair could suffer from overcapacity and its results of operations and financial condition (including its ability to fund scheduled aircraft purchases and related debt) could be materially adversely affected. See “—Risks Related to the Airline Industry—Volcanic Ash Emissions Could Affect the Company and Have a Material Adverse Effect on the Company’s Results of Operations.”

The expansion of Ryanair’s fleet and operations, in addition to other factors, may also strain existing management resources and related operational, financial, management information, and information technology systems, including Ryanair’s Internet-based reservation system, to the point that they may no longer be adequate to support Ryanair’s operations. This would require Ryanair to make significant additional expenditures. Expansion will generally require additional skilled personnel, equipment, facilities and systems. An inability to hire skilled personnel or to secure required equipment and facilities efficiently and in a cost-effective manner may adversely affect Ryanair’s ability to achieve growth plans and sustain or increase its profitability.

Ryanair’s New Routes and Expanded Operations may have an Adverse Financial Impact on its Results.Currently, a substantial number of carriers operate routes that compete with Ryanair’s, and the Company expects to face further intense competition. See “Item 4. Information on the Company—Industry Overview—European Market.”

When Ryanair commences new routes, its load factors initially tend to be lower than those on its established routes and its advertising and other promotional costs tend to be higher, which may result in initial losses that could have a material negative impact on the Company’s results of operations as well as require a substantial amount of cash to fund. In addition, there can be no assurance that Ryanair’s low-fares service will be accepted on new routes. Ryanair also periodically runs special promotional fare campaigns, in particular in connection with the opening of new routes. Promotional fares may have the effect of increasing load factors and reducing Ryanair’s yield and passenger revenues on such routes during the periods that they are in effect. See

“Item 4. Information on the Company—Route System, Scheduling and Fares.” Ryanair expects to have other substantial cash needs as it expands, including as regards the cash required to fund aircraft purchases or aircraft deposits related to the acquisition of additional Boeing 737-800s. There can be no assurance that the Company will have sufficient cash to make such expenditures and investments, and to the extent Ryanair is unable to expand its route system successfully, its future revenue and earnings growth will in turn be limited. Further volcanic ash emissions could make consumers less willing to travel and impact the launch of new routes or bases. See “—Risks Related to the Airline Industry—Volcanic Ash Emissions Could Affect the Company and Have a Material Adverse Effect on the Company’s Results of Operations.” See also “—The Company Will Incur Significant Costs Acquiring New Aircraft and the Continued Instability in the Credit and Capital Markets Could Negatively Impact Ryanair’s Ability to Obtain Financing on Acceptable Terms.”

Ryanair’s Continued Growth is Dependent on Access to Suitable Airports; Charges for Airport Access are Subject to Increase.Airline traffic at certain European airports is regulated by a system of grandfathered “slot” allocations. Each slot represents authorization to take-off and land at the particular airport during a specified time period. Although the majority of Ryanair’s bases currently have no slot allocations, traffic at a minority of the airports Ryanair serves, including its primary bases, is currently regulated through slot allocations. Applicable EU regulations appear to prohibit the buying or selling of slots for cash, although media reports indicate that the buying and selling of slots may have occurred at certain airports in Europe. Regardless of any such sales, there can be no assurance that Ryanair will be able to obtain a sufficient number of slots at slot-controlled airports that it may wish to serve in the future, at the time it needs them, or on acceptable terms. There can also be no assurance that its non-slot bases, or the other non-slot airports Ryanair serves, will continue to operate without slot allocations in the future. See “Item 4. Information on the Company—Government Regulation—Slots.” Airports may impose other operating restrictions such as curfews, limits on aircraft noise levels, mandatory flight paths, runway restrictions, and limits on the number of average daily departures. Such restrictions may limit the ability of Ryanair to provide service to, or increase service at, such airports.

Ryanair’s future growth also materially depends on its ability to access suitable airports located in its targeted geographic markets at costs that are consistent with Ryanair’s low-fares strategy. Any condition that denies, limits, or delays Ryanair’s access to airports it serves or seeks to serve in the future would constrain Ryanair’s ability to grow. A change in the terms of Ryanair’s access to these facilities or any increase in the relevant charges paid by Ryanair as a result of the expiration or termination of such arrangements and Ryanair’s failure to renegotiate comparable terms or rates could have a material adverse effect on the Company’s financial condition and results of operations. For example, in March 2007, the discount arrangement formerly in place at London (Stansted) airport terminated, subjecting Ryanair to an average increase in charges of approximately 100%. This increase in charges had a negative impact on yields and passenger volumes. In addition, the Dublin Airport Authority (“DAA”) recently completed a new terminal (Terminal 2) and other infrastructure at Dublin Airport at a cost in excess of €1.2 billion. As a result Ryanair does not currently intendof this capital expenditure, airport fees per departing passenger increased by 27% in May 2010, from €13.61 to €17.23, and could increase fares, but will instead meetby up to 8.0% in November 2010 to €18.64 following the threatopening of falling consumer demandTerminal 2 in November 2010 and by reducing faresup to gain market share. This strategy is extremely likelya further 12.0% in January 2011 to €20.88 in accordance with the CAR’s decision on December 4, 2009 in relation to airport charges between 2010 and 2014. Increases in airport charges tend to lead to increased fares and have an adverse impact on yields and passenger volumes at Dublin Airport. Ryanair has already responded to this change by moving to reduce capacity in both summer and winter periods. However, the Aviation Appeals Panel appointed by the Minister of Transport following a request from Ryanair ruled on June 2, 2010, that the Irish Commission for Aviation Regulation (“CAR”) should introduce differential pricing for the use of the existing Terminal 1 and the new Terminal 2. The CAR must decide whether to introduce such pricing by August 2, 2010. The Company is unsure as to whether the introduction of differential pricing will reduce costs at Dublin Airport. The increase in charges in May 2010, in combination with the introduction of the €10 Air Travel Tax described below, has led to substantially reduced passenger volumes and a significant decline in yields on flights to and from Dublin Airport. In June 2009, Ryanair announced that it was reducing its fleet at Dublin Airport to 17 by summer 2009, 16 by winter 2009, 15 by summer 2010 and 12 by winter 2010 (down from 22 in summer 2008 and 20 in winter 2008), as a result of rising airport charges and the introduction of an Air Travel Tax of €10 on all passengers departing from Irish airports on routes longer than 300 kilometers. Excluding the planned reduction by winter 2010, these reductions have been carried out. See “Item 4. Information on the Company—Airport Operations—Airport Charges.” See also “—The Company Is Subject to Legal Proceedings Alleging State Aid at Certain Airports.”

The Company’s Acquisition of 29.8% of Aer Lingus and Subsequent Failure to Conclude a Complete Acquisition of Aer Lingus Could Expose the Company to Risk.During the 2007 fiscal year, the Company acquired 25.2% of Aer Lingus. The Company increased its interest to 29.3% during the 2008 fiscal year, and to 29.8% during the 2009 fiscal year at a total aggregate cost of €407.2 million. Following the acquisition of its

initial stake and upon the approval of the Company’s shareholders, management proposed to effect a tender offer to acquire the entire share capital of Aer Lingus. This acquisition proposal was, however, blocked by the European Commission on competition grounds. Ryanair filed an appeal with the CFI, which was heard in July 2009. On July 6, 2010, the Court upheld the Commission’s decision. Ryanair has two months and 10 days from such date to appeal this judgment.

The then EU Commissioner for Competition, Neelie Kroes, said on June 27, 2007 that, “Since Ryanair is not in a position to exert de jure or de facto control over Aer Lingus, the European Commission is not in a position to require Ryanair to divest its minority shareholding, which is, by the way, not a controlling stake.” In October 2007, the European Commission also reached a formal decision that it would not force Ryanair to sell its shares in Aer Lingus. However, Aer Lingus appealed this decision before the CFI. In January 2008, the CFI heard an application by Aer Lingus for interim measures limiting Ryanair’s voting rights, pending a decision of the CFI on Aer Lingus’ appeal of the European Commission’s decision not to force Ryanair to sell the Aer Lingus shares. In March 2008, the court dismissed Aer Lingus’ application for interim measures. Aer Lingus’ main appeal was heard in July 2009. On July 6, 2010 the court rejected Aer Lingus’ appeal and confirmed that Ryanair cannot be forced to dispose of its 29.8% stake in Aer Lingus. Aer Lingus has two months and 10 days from such date to appeal this judgment to the Court of Justice of the EU. In addition to the risk that the Court of Justice may overturn the lower court’s ruling, should Aer Lingus choose to appeal it, EU legislation may change in the future to require such a forced disposition. If eventually forced to dispose of its stake in Aer Lingus, Ryanair could suffer significant losses due to the negative impact on attainable prices of the forced sale of such a significant portion of Aer Lingus’ shares.

During the 2010 fiscal year, Ryanair recorded an impairment charge recognized in the income statement of €13.5 million on its Aer Lingus shareholding reflecting a decline in the Aer Lingus share price from €0.59 at March 31, 2009 to €0.50 at June 30, 2009. The subsequent increase in the Aer Lingus share price from €0.50 at June 30, 2009 to €0.73 at March 31, 2010 resulted in a gain of €36.5 million, which was recognized through other comprehensive income within equity.

On December 1, 2008, Ryanair made a second offer to acquire all of the ordinary shares of Aer Lingus it did not own at a price of €1.40 per ordinary share. The offer of €1.40 per share represented a premium of approximately 25% over the closing price of €1.12 of Aer Lingus on November 28, 2008. Ryanair also advised the market that it would not proceed to seek EU approval for the new bid unless the shareholders agreed to sell their stakes in Aer Lingus to Ryanair. However, the Company was unable to secure the shareholders’ support, and accordingly on January 28, 2009, it withdrew its new offer for Aer Lingus.

Deteriorations in conditions in the airline industry affect the Company not only directly, but also indirectly, because the value of its stake in Aer Lingus fluctuates with the share price. However, as the value of the Company’s stake in Aer Lingus has already been written down to just €79.7 million (as of March 31, 2010), the potential for future write-downs of that asset is currently limited to that amount.

Labor Relations Could Expose the Company to Risk. A variety of factors, including, but not limited to, the Company’s historical and current level of profitability and its planned payment of a €500 million dividend to shareholders, may make it difficult for Ryanair to avoid increases to its base salary levels and employee productivity payments. Consequently, there can be no assurance that Ryanair’s existing employee compensation arrangements may not be subject to change or modification at any time. The Company has negotiated with all employee groups and has secured a pay freeze for fiscal years 2009, 2010 and 2011. In addition, the Company will eliminate any positions that may be significant,identified as redundant. These steps may lead to deteriorations in labor relations in the short term. Company and could impact the Company’s business or results of operations. The Company also operates in certain jurisdictions with above average payroll taxes and employee-related social insurance costs, which could have an impact on the availability and cost of employees in these jurisdictions.

Ryanair currently conducts collective bargaining negotiations with groups of employees, including its pilots, regarding pay, work practices, and conditions of employment, through collective-bargaining unites called “Employee Representation Committees.” In the U.K., BALPA unsuccessfully sought to represent Ryanair’s U.K.-based pilots in their negotiations with the Company in 2001, at which time an overwhelming majority of those polled rejected BALPA’s claim to represent them. On June 19, 2009, BALPA made a request for voluntary recognition under applicable U.K. legislation, which Ryanair rejected. BALPA has the option of applying to the U.K.’s Central Arbitration Committee (“CAC”) to organize a vote on union recognition by Ryanair’s pilots in relevant bargaining units, as determined by the CAC; however, in July 2009 BALPA confirmed that it was temporarily suspending its campaign. If BALPA were to proceed with an application to the CAC and be

successful in such a ballot initiative, this would allow it to represent the U.K. pilots at some or all U.K. bases in negotiations over salaries and working conditions. For additional details, see “Item 6. Directors, Senior Management and Employees—Employees and Labor Relations.” Limitations on Ryanair’s flexibility in dealing with its employees or the altering of the public’s perception of Ryanair generally could have a material adverse effect on the Company’s business, operating results, and financial condition.

The Company is Dependent on External Service Providers. Ryanair currently assigns its engine overhauls and “rotable” repairs to outside contractors approved under the terms of Part 145, the European regulatory standard for aircraft maintenance established by the European Aviation Safety Agency (“Part 145”). The Company also assigns its passenger and aircraft handling and ground handling services at airports other than Dublin and certain airports in Spain and the Canary Islands to established external service providers. See “Item 4. Information on the Company—Maintenance and Repairs—Heavy Maintenance” and “Item 4. Information on the Company—Airport Operations—Airport Handling Services.”

The termination or expiration of any of Ryanair’s service contracts or any inability to renew them or negotiate replacement contracts with other service providers at comparable rates could have a material adverse effect on the Company’s results of operations. Ryanair will need to enter into airport service agreements in any new markets it enters, and there can be no assurance that it will be able to obtain the necessary facilities and services at competitive rates. In addition, although Ryanair seeks to monitor the performance of external parties that provide passenger and aircraft handling services, the efficiency, timeliness, and quality of contract performance by external providers are largely beyond Ryanair’s direct control. Ryanair expects to be dependent on such outsourcing arrangements for the foreseeable future.

The Company is Dependent on Key Personnel.The Company’s success depends to a significant extent upon the efforts and abilities of its senior management team, including Michael O’Leary, the Chief Executive Officer, and key financial, commercial, operating and maintenance personnel. Mr. O’Leary’s current contract may be terminated by either party upon 12 months’ notice. See “Item 6. Directors, Senior Management and Employees—Compensation of Directors and Senior Management—Employment Agreements.” The Company’s success also depends on the ability of its executive officers and other members of senior management to operate and manage effectively, both independently and as a group. Although the Company’s employment agreements with Mr. O’Leary and some of its other senior executives contain non-competition and non-disclosure provisions, there can be no assurance that these provisions will be enforceable in whole or in part. Competition for highly qualified personnel is intense, and either the loss of any executive officer, senior manager, or other key employee without adequate replacement or the inability to attract new qualified personnel could have a material adverse effect upon the Company’s business, operating results, and financial condition.

The Company Faces Risks Related to its Internet Reservations Operations and its Announced Elimination of Airport Check-in Facilities. Approximately 99% of Ryanair’s flight reservations are made through its website. Although the Company has established a contingency program whereby the website is hosted in three separate locations, each of these locations accesses the same booking engine, located at a single center, in order to make reservations.

A back-up booking engine is available to Ryanair to support its existing platform in the event of a breakdown in this facility. Nonetheless, the process of switching over to the back-up engine could take some time and there can be no assurance that Ryanair would not suffer a significant loss of reservations in the event of a major breakdown of its booking engine or other related systems, which, in turn, could have a material adverse affect on the Company’s operating results or financial condition.

Since late 2007,October 1, 2009, all passengers have been required to use Internet check-in. Internet check-in is part of a package of measures intended to improve service by reducing airfares as well as reducing check-in lines. See “Item 4. Information on the Company—Reservations/Ryanair.com.” The Company has deployed this system across its network. Any disruptions to the Internet check-in service as a result of a breakdown in the relevant computer systems or otherwise could have a material adverse impact on these service-improvement and cost-reduction efforts. The result of this requirement is that Ryanair has reduced airport and handling costs, as a result of the need to have fewer check-in staff and rented check-in desks. There can be no assurance, however, that this process will continue to be successful or that consumers will not switch to other carriers that provide standard check-in facilities, which would negatively affect the Company’s results of operations and financial condition.

Risks Related to the Airline Industry

Volcanic Ash Emissions Could Affect the Company and Have a Material Adverse Effect on the Company’s Results of Operations.Between April 17 and April 22, 2010, the majority of the airspace over northern Europe was closed by authorities as a result of safety concerns presented by emissions of ash from an Icelandic volcano. This closure forced Ryanair to cancel 7,855 flights. Since then, there have been periodic closures of parts of the European airspace due to further emissions of ash from the same volcano, which have resulted in the cancellation of a further 1,635 flights.

Under the terms of Regulation (EC) No. 261/2004, described below, Ryanair has certain duties to passengers whose flights are cancelled. In particular, Ryanair is required to reimburse passengers who have had their flights cancelled for certain reasonable, documented expenses—primarily for accommodation and food. As of the date hereof, the Company is uncertain as to the number of claims it will receive or the amount it will have to reimburse passengers in respect of these claims, but the Company expects that the amount will be significant. The Company estimates that the non-recoverable fixed costs associated with the cancellations, the repositioning costs for aircraft, and other costs associated with cancellations, as well as the aforementioned reimbursement claims for the initial 6.5 days of closure of European aerospace will amount to approximately €6 million per day, or approximately €40m for such initial period of closure. Based on the latest information available, the Company estimates that the cumulative costs in respect of volcanic ash disruptions experienced to date, excluding taxation credits, will amount to approximately €50 million. The Company has re-accommodated or refunded fares to approximately 1.5 million passengers due to flight cancellations.

Volcanic emissions may continue for some time and could lead to further flight cancellation costs which could have a material adverse impact on the Company’s financial condition and results of operations. Furthermore, volcanic emissions (whether from current or new sources) or similar atmospheric disturbances and resulting cancellations due to the closure of airports could also have a material adverse affect on the Company’s financial performance indirectly, as a consequence of changes in the public’s willingness to travel within Europe due to the risk of flight disruptions.

The Airline Industry Is Particularly Sensitive to Changes in Economic Conditions; A Continued Recessionary Environment Would Negatively Impact Ryanair’s Result of Operations. Ryanair’s operations and the airline industry in general are sensitive to changes in economic conditions. Unfavorable economic conditions have deteriorated in Ireland,such as high unemployment rates, constrained credit markets and increased business operating costs lead to reduced spending by both leisure and business passengers. Unfavorable economic conditions, such as the conditions persisting as of the date hereof, also tend to impact Ryanair’s ability to raise fares to counteract increased fuel and other operating costs. Total demand for European air travel has weakened between the period of the latter half of 2008 and the first half of 2010, which Ryanair believes can be primarily attributed to the crisis experienced in the United Kingdomworldwide credit markets, high oil prices and elsewherethe global recession. A continued recessionary environment, combined with austerity measures by European governments, will likely negatively impact Ryanair’s operating results. It could also restrict the Company’s ability to grow passenger volumes, secure new airports and launch new routes and bases, and could have a material adverse impact on its financial results. Furthermore, demand for air travel could be impacted by emissions of volcanic ash, as noted above.

The Introduction of Government Taxes on Travel Could Damage Ryanair’s Ability to Grow and Could Have a Material Adverse Impact on Operations. The U.K. government levies an Air Passenger Duty (APD) of £11 per passenger. The tax was previously set at £5 per passenger, but it was increased to £10 per passenger in 2007 and £11 in 2009. The increase in this tax is thought to have had a negative impact on Ryanair’s operating performance, both in terms of average fares paid and growth in passenger volumes. In 2008, the Dutch government introduced a travel tax ranging from €11 on short-haul flights to €45 on long-haul flights. On March 30, 2009, the Irish government also introduced a €10 Air Travel Tax on all passengers departing from Irish airports on routes longer than 300 kilometers.

Both the Belgian and Greek governments planned to introduce similar taxes; however, they have now cancelled plans to introduce these taxes. The Dutch government withdrew its travel tax with effect from July 1, 2009. The introduction of government taxes on travel has had a negative impact on passenger volumes, particularly given the current period of decreased economic activity. The German government has also announced that it plans to introduce a passenger tax in 2010 for all departing passengers, however to date, no details on the amount of this charge have been published. The introduction of further government taxes on travel across Europe, such as that proposed by the German government in June 2010, could have a material negative impact on Ryanair’s results of operations as a result of price-sensitive passengers being less likely to travel.

Any Significant Outbreak of any Airborne Disease, Including Swine Flu or Foot-and-Mouth Disease, Could Significantly Damage Ryanair’s Business. Worldwide, there has, from time to time, been substantial publicity in recent years regarding certain potent influenza viruses and other disease epidemics. Publicity of this type may have a negative impact on demand for air travel in Europe. Past outbreaks of SARS, foot-and-mouth disease, avian flu and swine flu have adversely impacted the travel industries, including aviation, in certain regions of the world, including Europe. The Company believes that if any influenza or other pandemic becomes severe in Europe, its effect on demand for air travel in the markets in which Ryanair operates could be material, and it could therefore have a significantly adverse impact on the Company. A severe outbreak of swine flu, SARS, foot-and-mouth disease, avian flu or another pandemic or livestock-related disease also may result in European or national authorities imposing restrictions on travel, further damaging Ryanair’s business. A serious pandemic could therefore severely disrupt Ryanair’s business, resulting in the cancellation or loss of bookings, and adversely affecting Ryanair’s financial condition and results of operations.

EU Regulation on Passenger Compensation Could Significantly Increase Related Costs. The EU has passed legislation for compensating airline passengers who have been denied boarding on a flight for which they hold a valid ticket (Regulation (EC) No. 261/2004). This legislation, which came into force on February 17, 2005, imposes fixed levels of compensation to be paid to passengers in the event of cancelled flights. In November 2009, the Court of Justice of the EU in the Sturgeon case decided that provisions of the legislation in relation to compensation are not only applicable to flight cancellations but also to delays of over three hours. However, such provisions, by their terms, do not apply to any cancellation, or any delay over three hours, in circumstances in which the airline is able to prove that such cancellation or delay was caused by extraordinary circumstances, such as weather, air-traffic control delays, or safety issues. Otherwise, the regulation calls for compensation of €250, €400, or €600 per passenger, depending on the length of the flight. As Ryanair’s average flight length is less than 1,500 km—the upper limit for short-haul flights—the amount payable is generally €250 per passenger per occurrence. Passengers subject to long delays (in excess of two hours for short-haul flights) are also entitled to “assistance,” including meals, drinks and telephone calls, as well as hotel accommodations if the delay extends overnight. For delays of over five hours, the airline is also required to offer the option of a refund of the cost of the unused ticket. There can be no assurance that the Company will not incur a significant increase in costs in the future due to the impact of this legislation, if Ryanair experiences a large number of cancelled flights, which could occur as a result of certain types of events beyond its control. See “—Risks Related to the Airline Industry—Volcanic Ash Emissions Could Affect the Company and Have a Material Adverse Effect on the Company’s Results of Operations.”

EU Regulation of Emissions Trading Could Increase Costs. On November 19, 2008, the European Council of Ministers adopted legislation to add aviation to the EU Emissions Trading Scheme with effect from 2012. This scheme, which has thus far applied mainly to energy producers, is a cap-and-trade system for CO₂ emissions to encourage industries to improve their CO₂ efficiency. Under the legislation, airlines will be granted initial CO₂ allowances based on historical performance and a CO₂ efficiency benchmark. Any shortage of allowances will have to be purchased in the open market and/or at government auctions. The cost and amount of such allowances that Ryanair will have to buy in 2012 have yet to be determined. There can be no assurance that Ryanair will be able to obtain sufficient carbon credits or that the cost of the credits will not have a material adverse effect on the Company’s business, operating results, and financial condition.

The Company is Dependent on the Ireland-U.K. Market” below. Even taking into accountContinued Acceptance of Low-fares Airlines.In past years, accidents or other safety-related incidents involving certain low-fares airlines have had a negative impact on the public’s acceptance of such airlines. Any adverse event potentially relating to the safety or reliability of low-fares airlines (including accidents or negative reports from regulatory authorities) could adversely impact the public’s perception of, and confidence in, low-fares airlines like Ryanair, and could have a material adverse effect on the Company’s plans to reduce fares, the Company is likely to face pressure on its faresfinancial condition and yields as a result of the changed economic circumstances of its passengers. If the Company is not able to increase its fares and yields to temper the significant inflation in its input costs, particularly fuel costs, the Company’s results of operations are likely to be materially adversely affected and it is likely that the Company will incur losses even greater than those that it might otherwise incur. Every 1% movement in average fares tends to impact Ryanair’s net income by approximately €26 million.operations.

Terrorism in the United Kingdom or Elsewhere in Europe Could Have a Material Detrimental Effect on the Company. On August 10, 2006, U.K. security authorities arrested and subsequently charged eight individuals in connection with an alleged plot to attack aircraft operating on transatlantic routes. As a result of these arrests, U.K. authorities introduced increased security measures, which resulted in all passengers being body-searched, and a ban on the transportation in carry-on baggage of certain liquids and gels. The introduction of these measures led to passengers suffering severe delays while passing through these airport security checks. As a result, Ryanair cancelled 279 flights in the days following the incident and refunded a total of €2.7 million in fares to approximately 40,000 passengers. In the days following the arrests, Ryanair also suffered reductions in bookings estimated to have resulted in the loss of approximately €1.9 million of additional revenue. As in the past, the Company reacted to these adverse events by initiating system-wide fare sales to stimulate demand for air travel.

On September 1, 2006, Ryanair filed a claim for €4.6 million in compensation against the U.K. Department of Transport under section 93 of the U.K. Transport Act 2000. Section 93 of the act provides for compensation for airlines in cases in which the department has issued directions under the act that have led to financial damages to the airlines. The case, which is to be heard in the London High Court, is currently adjourned pending the outcome of consultation by the Department of Transport on membership of the UK National Aviation Security Council.

In addition, reservations on Ryanair’s flights to London dropped materially for a number of days in the immediate aftermath of the terrorist attacks in London on July 7, 2005. Although the terrorist attack in Glasgow on June 30, 2007 (in which a car filled with explosives was driven into the GlasgowGlasgow’s airport) and the failed terrorist attacks in London on July 21, 2005 and June 29, 2007 had no material impact on bookings, there can be no assurance that future such attacks will not affect our passenger traffic. In the 20082010 fiscal year, 17.8 million passengers were booked on Ryanair’s flights into and out of London, accounted for €18.6 million, or approximately 37%,representing 26.7% of the total passengers travelingbooked on all of the Company’s network. Inflights in the 2007 and 2006 fiscal years, flights into and out of London accounted for 18.9 million passengers and 17.5 million passengers, respectively, or approximately 44% and 50%, respectively, of passengers traveling on the Company’s network.

year. Future acts of terrorism or significant terrorist threats, particularly in London or other markets that are significant to Ryanair, could have a material adverse effect on the Company’s profitability or financial condition should the public’s willingness to travel to and from those markets be reduceddecline as a result. See also “Risks Related to the Airline Industry—“—The 2001 Terrorist Attacks on the United States Had a Severe Negative Impact on the International Airline Industry.”

The Company is Subject to Legal Proceedings Alleging State Aid at Certain Airports. In December 2002, the European Commission announced the launch of an investigation into the April 2001 agreement between Ryanair and Brussels (Charleroi) airport and the airport’s owner, the government of the Walloon Region of Belgium. The agreement enabled the Company to launch new routes and base up to four aircraft at Brussels (Charleroi).

In February 2004, the European Commission found that a portion of the arrangements between Ryanair, the airport and the region constituted state aid, and therefore ordered Ryanair to repay the amount of the benefit received in connection with those arrangements. In May 2004, Ryanair appealed the decision of the European Commission to the European Court of First Instance (“CFI”), requesting that the decision be annulled. The CFI heard Ryanair’s appeal in March 2008 and Ryanair is awaiting the decision of the court.In addition, in April 2004, the Walloon Region wrote to Ryanair requesting repayment of all amounts that had been deemed illegal, although it acknowledged Ryanair’s right to offset against these amounts certain costs incurred in relation to the establishment of the base, in accordance with the European Commission’s decision. In September 2004, the Walloon Region issued a formal demand that Ryanair repay a total of approximately €4 million, excluding any interest that may be due. Ryanair believes that no repayment is due when such offsets are taken into account, although it has placed this amount in escrow pending the outcome of its appeal.

In May 2005, the Walloon Region initiated a new proceeding currently pending before the Irish High Court to recover a further €2.3 million in start-up costs that had been reimbursed to Ryanair in connection with its establishment of the base. Ryanair does not believe any such payment is due and is currently defending the action. For additional details on this matter, please see “Item 8. Financial Information—Other Financial Information—Legal Proceedings.”

On September 6, 2005, the European Commission announced new guidelines on the financing of airports and provision of start-up aid to airlines by certain publicly-owned airports based on the European Commission’s finding in the Charleroi case. See “Item 8. Financial Information—Consolidated Financial Information—Legal Proceedings.”

In an unrelated, though similar, matter, in July 2003, a Strasbourg court ruled (on the basis of a complaint by the Air France Group (“Air France”)) that marketing support granted by the Strasbourg Chamber of Commerce to Ryanair in connection with its launch of services from Strasbourg to London (Stansted) constituted state aid. The judgment took effect on September 24, 2003 and was upheld on appeal. As a result of the initial decision of the Strasbourg court to annul Ryanair’s contract with Strasbourg Airport, Ryanair decided to close the Strasbourg route and instead opened a route from Baden-Karlsruhe in Germany to London (Stansted) (Baden airport is located some 40 kilometers from Strasbourg).

Ryanair is facing similar legal challenges by third parties (mainly competing airlines) with respect to agreements with certain other airports. In 2007 and 2008, the European Commission announced that it had started investigations of airport agreements at the Hamburg (Lubeck), Tampere, Berlin (Schonefeld), Alghero, Pau, Bratislava and Dortmund airports; however, Ryanair has only limited operations to and from the first six of these airports and does not operate flights to or from Dortmund. On June 17, 2008, the European Commission launched a further investigation into Ryanair’s agreements at Frankfurt (Hahn) airport, which is a significant base for Ryanair. The European Commission announced in a public statement that its initial investigation had found that the airport might have acted like a private market investor but that it had insufficient evidence to reach a conclusion and therefore had elected to open a formal investigation. The formal investigation is ongoing and is expected to last between a year and 18 months. However, complaints by Lufthansa about Ryanair’s cost base have been rejected by German courts.

Adverse rulings in these or similar cases could be used as precedents by other competitors to challenge Ryanair’s agreements with other publicly-owned airports and could cause Ryanair to strongly reconsider its growth strategy in relation to public or state-owned airports across Europe. This could in turn lead to a scaling-back of Ryanair’s growth strategy due to the smaller number of privately-owned airports available for development. No assurance can be given as to the outcome of these proceedings, nor as to whether any unfavorable outcomes may, individually or in the aggregate, have a material adverse effect on the results of operation or financial condition of the Company.

The Company Faces Significant Price and Other Pressures in a Highly Competitive Environment. Ryanair operates in a highly competitive marketplace, with a large number of new entrants, traditional airlines and charter airlines competing throughout the route network. Airlines compete primarily with respect to fare levels, frequency and dependability of service, name recognition, passenger amenities (such as access to frequent flyer programs) and the availability and convenience of other passenger services. Unlike Ryanair, certain of Ryanair’s competitors are state-owned or state-controlled flag carriers and in some cases may have greater name recognition and resources and may have received or may receive in the future significant amounts of subsidies and other state aid from their respective governments. In addition, the EU-US Open Skies Agreement, which was signed in April 2007 and entered into effect in March 2008, allows U.S. carriers to offer services in the intra-EU market, which will result in increased competition. See “Item 4. Information on the Company—Government Regulation—Liberalization of the EU Air Transportation Market.”

The airline industry is highly susceptible to price discounting, in part because airlines incur very low marginal costs for providing service to passengers occupying otherwise unsold seats. The number of new-entrant low-fares airlines and traditional carriers offering lower, more competitive fares in direct competition with Ryanair across its route network has increased significantly as a result of the liberalization of the EU air transport market and greater public acceptance of the low-fares model. Increasing price competition and the resulting lower fares, combined with the continuing increases in the Company’s capacity in recent years (including an increase of approximately 21% during the 2008 fiscal year) have combined to put downward pressure on the Company’s yields. Ryanair’s yield per available seat mile (“ASM”) increased by 1.7% in the 2007 fiscal year and decreased by 7.8% in the 2008 fiscal year.

Although Ryanair intends to compete vigorously and to assert its rights against any predatory pricing or other conduct, price competition among airlines could reduce the level of fares or passenger traffic on the Company’s routes to the point where profitability may not be achieved.

In addition to traditional competition among airline companies and charter operators who have entered the “low fares” market, the industry also faces some limited competition from ground (including high speed rail systems such as the “TGV” in France) and sea transportation alternatives, as businesses and recreational travelers seek lower-cost or more comfortable or convenient substitutes for air travel.

The Company Will Incur Significant Costs Acquiring New Aircraft. Ryanair’s continued growth is dependent upon its ability to acquire additional aircraft to meet additional capacity needs and to replace aging aircraft.

Ryanair expects to have at least 195 aircraft (assuming that the planned disposal of 17 such aircraft is completed on schedule) in its fleet by March 31, 2009. With the Company’s current orders for aircraft it is obligated to buy (i.e., “firm” orders) under its contracts with The Boeing Company (“Boeing”), the Company expects to increase the size of its fleet to consist of 265 Boeing 737-800 “next generation” aircraft by December 2012 (assuming that the planned disposal or return of operating lease aircraft at the end of the contracting lease period is completed on schedule), and may elect to enlarge its fleet further by exercising any of the 107 options to purchase new aircraft it currently has for periods through fiscal 2014 under its agreements with Boeing. For additional information on the Company’s aircraft fleet and expansion plans, see “Item 4. Information on the Company—Aircraft” and “Item 5. Operating and Financial Review and Prospects—Liquidity and Capital Resources.” There can be no assurance that this planned expansion will not outpace the growth of passenger traffic on Ryanair’s routes, or that traffic growth will not prove to be greater than the expanded fleet can accommodate; in either case, such developments could have a material adverse effect on the Company’s business, results of operations and financial condition.

Ryanair plans to finance its existing firm-order aircraft through a combination of new bank loan facilities supported by a guarantee from the Export-Import Bank of the United States (“ExIm Bank”) and similar to those already in place, bank debt provided by commercial bankers, operating and finance leases via sale-and-leaseback transactions, Enhanced Equipment Trust Certificates and cash flow generated from the Company’s operations. However, due to the significant general deterioration in the availability of bank credit facilities over the last year, no assurance can be given that such financing will be available to Ryanair, or that the terms of any such financing will be favorable. Any inability of the Company to obtain financing for the new aircraft on advantageous terms could have a material adverse effect on its business, results of operations and financial condition.

In addition, the financing of new and existing Boeing 737-800 aircraft has already and will continue to significantly increase the total amount of the Company’s outstanding debt and the payments it is obliged to make to service such debt. Furthermore, Ryanair’s ability to draw down funds under its existing bank loan facilities to pay for aircraft as they are delivered is subject to various conditions imposed by the counterparties to such bank loan facilities and related loan guarantees, and any future financing is expected to be subject to similar conditions. The Company currently has a preliminary commitment from the ExIm Bank to provide a loan guarantee covering 37 of the 135 firm-order aircraft. The Company has financing mandates in place covering the next 71 firm-order aircraft deliveries through a combination of committed bank loan facilities, operating leases and Japanese Operating Leases with Call Options (“JOLCOs”). For additional details on Ryanair’s financings, see “Item 5. Operating and Financial Review and Prospects—Liquidity and Capital Resources.”

The Company’s Rapid Growth May Expose it to Risks.Ryanair’s operations have grown rapidly since it pioneered the low-fares operating model in Europe in the early 1990s. See “Item 5. Operating and Financial Review and Prospects—History.” During the 2008 fiscal year, Ryanair announced 201 new routes and added destinations in two new countries, Switzerland and Romania, which are serviced by routes originating in the

U.K., Ireland, Spain, Sweden and Italy. Ryanair intends to continue to expand its fleet and add new destinations and additional flights, which are expected to increase Ryanair’s booked passenger volumes in the 2009 fiscal year to approximately 58 million passengers, an increase of approximately 14% over the 2008 fiscal year level of approximately 51 million passengers, although no assurance can be given that these targets will in fact be met. If growth in passenger traffic and Ryanair’s revenues do not keep pace with the planned expansion of its fleet, Ryanair could suffer from overcapacity and its results of operations and financial condition (including its ability to fund scheduled aircraft purchases and related debt) could be materially adversely affected. Ryanair has also entered into significant derivative transactions intended to hedge its current aircraft acquisition-related debt obligations. These derivative transactions expose Ryanair to certain risks and could have adverse effects on its results of operations and financial condition. See “Item 11. Quantitative and Qualitative Disclosures About Market Risk.”

The expansion of Ryanair’s fleet and operations, in addition to other factors, may also strain existing management resources and related operational, financial, management information and information technology systems, including Ryanair’s Internet-based reservation system, to the point that they may no longer be adequate to support Ryanair’s operations. This would require Ryanair to make significant additional expenditures. This expansion will also require additional skilled personnel, equipment facilities and systems. An inability to hire skilled personnel or to secure the required equipment and facilities efficiently and in a cost-effective manner may adversely affect Ryanair’s ability to achieve growth plans and sustain or increase its profitability.

Ryanair’s New Routes and Expanded Operations may have an Adverse Financial Impact on its Results.Currently, a substantial number of low-fares carriers operate routes that compete with Ryanair’s and the Company expects Ryanair to face further intense competition. See “Item 4. Information on the Company—Industry Overview—European Market.”

When Ryanair commences new routes, its load factors initially tend to be lower than those on its established routes and its advertising and other promotional costs tend to be higher, which may result in initial losses that could have a material negative impact on the Company’s results of operations as well as require a substantial amount of cash to fund. In addition, there can be no assurance that Ryanair’s low-fares service will be accepted on new routes. Ryanair also periodically runs special promotional fare campaigns, in particular in connection with the opening of new routes. Promotional fares may have the effect of increasing load factors and reducing Ryanair’s yield and passenger revenues on such routes during the periods that they are in effect. See “Item 4. Information on the Company—Route System, Scheduling and Fares.” Ryanair expects to have other substantial cash needs as it expands, including as regards the cash required to fund aircraft purchases or aircraft deposits related to the acquisition of additional Boeing 737-800s. There can be no assurance that the Company will have sufficient cash to make such expenditures and investments, and to the extent Ryanair is unable to expand its route system successfully, its future revenue and earnings growth will in turn be limited.

Ryanair’s Continued Growth is Dependent on Access to Suitable Airports; Charges for Airport Access are Subject to Increase.Airline traffic at certain European airports is regulated by a system of grandfathered “slot” allocations. Each slot represents authorization to take-off and land at the particular airport during a specified time period. Although the majority of Ryanair’s bases currently have no slot allocations, traffic at a minority of the airports Ryanair serves, including its primary bases are currently regulated through slot allocations. Applicable EU regulations would appear to prohibit the buying or selling of slots for cash, although media reports indicate that the buying and selling of slots may be happening at certain airports in Europe, including London Heathrow. Regardless of any such sales, there can be no assurance that Ryanair will be able to obtain a sufficient number of slots at slot-controlled airports that it may wish to serve in the future at the time it needs them or on acceptable terms. There can also be no assurance that its non-slot bases or the other non-slot airports Ryanair serves will continue to operate without slot allocations in the future. See “Item 4. Information on the Company—Government Regulation—Slots.” Airports may impose other operating restrictions such as curfews, limits on aircraft noise levels, mandatory flight paths, runway restrictions and limits on the number of average daily departures. Such restrictions may limit the ability of Ryanair to provide service to or increase service at such airports.

Ryanair’s future growth is also materially dependent on its ability to access suitable airports located in its targeted geographic markets at costs that are consistent with Ryanair’s low-fares strategy. Any condition that denies, limits or delays Ryanair’s access to airports it serves or seeks to serve in the future would constrain Ryanair’s ability to grow. A change in the terms of Ryanair’s access to these facilities or any increase in the relevant charges paid by Ryanair as a result of the expiration or termination of such arrangements and Ryanair’s failure to renegotiate comparable terms or rates could have a material adverse effect on the Company’s financial condition and results of operations. For example, in March 2007 the discount arrangement formerly in place at

London (Stansted) airport terminated, subjecting Ryanair to an average increase in charges of approximately 100%. This increase in charges had, as expected, a negative impact on yields and passenger volumes. In addition, in September 2006, the Dublin Airport Authority (“DAA”) announced that it was planning to build a new terminal (Terminal 2) at Dublin Airport at a cost of approximately €800 million. This capital expenditure will mean that charges at Dublin Airport will increase significantly, possibly doubling from their current level, leading to increased fares and consequently having an adverse impact on yields and passenger volumes at Dublin Airport. Ryanair has responded to these charge increases by reducing capacity in winter periods in which the charge increases make operating at previous capacity more difficult.

The company has recently announced capacity reductions, primarily at Dublin and London (Stansted) airports, the two most expensive airports in terms of airport charges that Ryanair serves. As a result of these airports’ high charges, certain routes are not economically viable to operate during the winter when the company typically experiences lower load factors and fares. Accordingly, the company has announced its intention to ground 15 aircraft at London (Stansted) from November 1, 2008 through March 31, 2009 (last year Ryanair grounded 7 aircraft during the winter) and a further four aircraft at Dublin airport during the same period.

In addition the company has also announced that from November 1, 2008 to December 19th, 2008, it will close its base at Valencia. Furthermore, Ryanair has announced that it will temporarily suspend services to Budapest, Basel, Palma, Salzburg, Krakow and Rzeszow this winter. As a result of these capacity reductions, Ryanair expects that total passengers booked this year will rise by approximately 14%, bringing the total number of passengers booked to approximately 58 million, lower than the 16% growth, or 59 million booked passengers, previously forecast.

See “Item 4. Information on the Company—Airport Operations—Airport Charges.” See also “—The Company Is Subject to Legal Proceedings Alleging State Aid at Certain Airports.”

The Company’s Acquisition of 29.8% of Aer Lingus and Subsequent Failure to Conclude a Complete Acquisition of Aer Lingus Could Expose the Company to Risk. During the year ended March 31, 2007, the Company acquired 25.2% of Aer Lingus. The Company increased its holding to 29.3% during the year ended March 31, 2008, and, subsequent to the year-end, it increased its stake to 29.8%, at a total aggregate cost of €403.0 million. Following the acquisition of its initial stake, and upon the approval of the Company’s shareholders, management proposed to effect a tender offer to acquire the entire share capital of Aer Lingus. This acquisition proposal was, however, blocked by the European Commission on alleged competition grounds. The EU Commissioner for Competition, Neelie Kroes, said on June 27, 2007 that, “Since Ryanair is not in a position to exert de jure or de facto control over Aer Lingus, the European Commission is not in a position to require Ryanair to divest its minority shareholding, which is, by the way, not a controlling stake”. In October 2007, the European Commission also reached a formal decision that it would not force Ryanair to sell its shares in Aer Lingus. However, Aer Lingus has appealed this decision before the CFI and the CFI may overturn the decision. Moreover, the policy of the European Commission may change in the future so as to require such a forced disposition. In January 2008, the CFI heard an application by Aer Lingus for interim measures limiting Ryanair’s voting rights, pending a decision of the CFI on Aer Lingus’ appeal of the European Commission’s decision not to force Ryanair to sell the Aer Lingus shares. In March 2008, the court dismissed Aer Lingus’ application for interim measures. If eventually forced to dispose of its stake in Aer Lingus, Ryanair could suffer significant losses due to the negative impact on attainable prices of the forced sale of such a significant portion of Aer Lingus’ shares. Ryanair’s own appeal to the European Commission decision blocking the tender offer remains pending. During the 2008 fiscal year, Ryanair recognized an impairment charge of €91.6 million on its Aer Lingus shareholding, reflecting the fall in Aer Lingus’ share price from the dates of purchase to March 31, 2008. Subsequently, in the first quarter of the 2009 fiscal year, the Company recognized a further impairment charge of $93.6 million. Generally deteriorating conditions in the airline industry affect the Company not only directly, but also indirectly, because the value of its stake in Aer Lingus can rise and fall as the share price fluctuates.

Labor Relations Could Expose the Company to Risk. A variety of factors, including, but not limited to, the Company’s recent profitability, may make it more difficult for Ryanair to maintain its current base salary levels and current employee productivity and compensation arrangements. Consequently, there can be no assurance that Ryanair’s existing employee compensation arrangements may not be subject to change or modification at any time. However, given deterioration in the economic prospects of the Company, the Company has sought to freeze certain employees’ pay and eliminate redundant positions. These steps may lead to deteriorations in labor relations in the Company and could impact the Company’s business or results of operations.

The Company completed the retirement of its entire fleet of Boeing 737-200A aircraft based in Dublin in December 2005 and replaced them with Boeing 737-800 aircraft. As a result of the retirement of the Boeing 737-200A aircraft, Ryanair required its pilots who lacked the necessary training to undergo a conversion training

process to enable them to fly the new Boeing 737-800 aircraft. Starting in the fall of 2004, Ryanair made a number of written offers to its Dublin-based pilots to enable them to participate in a re-training process in order to obtain the correct type-rating for flying the Boeing 737-800 aircraft. All of these pilots have now been trained on the Boeing 737-800 aircraft, either by paying in advance the €15,000 cost of the conversion training, or by executing a five-year bond, under which the training is provided free of charge unless the pilots do not maintain their employment with Ryanair for a period of at least five years, in which case they are obligated to reimburse Ryanair for the training costs.

In the Irish High Court, 64 pilots (only 13 of whom remain in the Company’s employment) have initiated proceedings claiming that the terms of the bond referred to above infringed their freedom of association rights and their right to allow trade unions to negotiate on their behalf.

Ryanair currently negotiates with groups of employees, including its pilots, through “Employee Representation Committees,” regarding pay, work practices and conditions of employment, including conducting formal binding negotiations with these internally elected collective bargaining units. Ryanair considers its relationships with its employees to be good, although it has once in the past experienced work stoppages by a group of baggage handlers. In addition, in the United Kingdom, the British Airline Pilots Association (“BALPA”) in 2001 unsuccessfully sought to represent Ryanair’s U.K.-based pilots in their negotiations with the Company. BALPA may request that a new ballot on representation be undertaken among Ryanair’s U.K. pilot body, which, if successful, would allow the U.K. pilots to be represented by BALPA in negotiations over pilot salaries and working conditions. For additional details, see “Item 6. Directors, Senior Management and Employees—Employees and Labor Relations.”

If any future occurrence were to limit Ryanair’s flexibility in dealing with its employees or alter the public’s perception of Ryanair generally, this could have a material adverse effect on the Company’s business, operating results and financial condition.

The Company is Dependent on the Ireland-U.K. Market.For the fiscal years ended March 31, 2008 and 2007, passengers on Ryanair’s routes between Ireland and the U.K. accounted for 15.2% and 15.4%, respectively, of total passenger revenues, with routes between Dublin and London accounting for 4.9% of total passenger revenues in the 2008 and 2007 fiscal years, and the Dublin-London (Stansted) route alone accounting for 2.4% of such totals. Ryanair’s business is likely to be adversely affected by any circumstance causing a reduction in general demand for air transportation services between Ireland and the U.K., including, but not limited to, adverse changes in local economic conditions. In recent quarters, Ireland and the U.K. have experienced declining (or in Ireland’s case, negative) growth and increasing inflation. These factors are likely to impact demand for air travel and the Company cannot offer any assurances in regards to the performance of its business model under changed economic conditions.

Political disruptions or violence (including terrorism) in Ireland or the U.K. or significant price increases linked to increases in airport access costs or taxes imposed on air passengers in Ireland or the U.K. could also have a material adverse effect on the Company’s business. See “—Terrorism in the United Kingdom or Elsewhere in Europe Could have a Material Detrimental Effect on the Company” above. In addition, so long as the Company’s operations remain dependent on routes between Ireland and the U.K., the Company’s future operations will be adversely affected if there is increased competition in this market. See “Item 4. Information on the Company—Industry Overview—Ireland-U.K. and Continental European Market.”

The Company is Dependent on Third-Party Service Providers. Ryanair currently assigns its heavy airframe maintenance overhauls, engine overhauls and “rotable” repairs to outside contractors approved under the terms of Part 145, the European regulatory standard for aircraft maintenance established by the European Aviation Safety Agency (“Part 145”). The Company also assigns its passenger and aircraft handling and ground handling services at airports other than Dublin and those served by Ryanair in Spain to established third-party providers. See “Item 4. Information on the Company—Maintenance and Repairs—Heavy Maintenance” and “Item 4. Information on the Company—Airport Operations—Airport Handling Services.”

The loss or expiration of any of Ryanair’s third-party service contracts or any inability to renew them or negotiate replacement contracts with other service providers at comparable rates could have a material adverse effect on the Company’s results of operations. Ryanair will need to enter into airport services agreements in any new markets it enters, and there can be no assurance that it will be able to obtain the necessary facilities and services at competitive rates in new markets. In addition, although Ryanair seeks to monitor the performance of third parties that provide passenger and aircraft handling services, the efficiency, timeliness and quality of contract performance by third-party providers are largely beyond Ryanair’s direct control. Ryanair expects to be dependent on such third-party arrangements for the foreseeable future.

The Company is Dependent on Key Personnel.The Company’s success depends to a significant extent upon the efforts and abilities of its senior management team, including Michael O’Leary, the Chief Executive of Ryanair, and key financial, commercial, operating and maintenance personnel. Mr. O’Leary’s current contract may be terminated by either party upon 12 months’ notice. See “Item 6. Directors, Senior Management and Employees—Compensation of Directors and Senior Management—Employment Agreements.” The Company’s success also depends on the ability of its executive officers and other members of senior management to operate and manage effectively, both independently and as a group. Although the Company’s employment agreements with Mr. O’Leary and some of its other senior executives contain non-competition and non-disclosure provisions, there can be no assurance that these provisions will be enforceable in whole or in part. Competition for highly qualified personnel is intense, and either the loss of any executive officer, senior manager or other key employee without adequate replacement or the inability to attract new qualified personnel could have a material adverse effect upon the Company’s business, operating results and financial condition.

The Company Faces Risks Related to its Internet Reservations Operations. As of July 31, 2008, approximately 99% of Ryanair’s daily flight reservations were made through its website. Although the Company has established a contingency program whereby the website is hosted in three separate locations, each of these locations accesses the same booking engine, located at a single center, in order to make reservations.

A back-up booking engine is available to Ryanair to support its existing platform in the event of a breakdown in this facility. However, there can be no assurance that Ryanair would not suffer a significant loss of reservations in the event of a major breakdown of these systems, which, in turn, could have a material adverse affect on the Company’s operating results or financial condition.

In addition, in March 2006, Ryanair also commenced its Check’N’Go Internet check-in service. Check’N’Go is part of a package of measures intended to improve service by reducing airfares as well as reducing check-in and boarding gate lines. See “Item 4. Information on the Company—Reservations/Ryanair.com.” The Company has rolled this system out across its network, although passengers departing from Malta or Romania, or to or from Morocco, cannot make use of the system. Any disruptions to the Internet check-in service as a result of a breakdown in the relevant computer systems or otherwise could have a material adverse impact on these service improvement efforts and make passengers less likely to use these services, and, as a result, negatively affect the Company’s operating results.

Risks Related to the Airline Industry

EU Regulation on Passenger Compensation Could Significantly Increase Related Costs. The EU has passed legislation for compensating airline passengers who have been denied boarding on a flight for which they hold a valid ticket (Regulation (EC) No. 261/2004). This legislation, which came into force on February 17, 2005, imposes fixed levels of compensation to be paid to passengers in the event of cancelled flights, except when the airline can prove that such a cancellation is caused by extraordinary circumstances, such as weather, air-traffic control delays or safety issues. The regulation calls for compensation of €250, €400 or €600 per passenger, depending on the length of the flight. As Ryanair’s average flight length is less than 1,500 km—the upper limit for short-haul flights—the amount payable is generally €250 per passenger, per occurrence. Passengers subject to long delays (in excess of two hours for short-haul flights) are also entitled to “assistance” including meals, drinks and telephone calls, as well as hotel accommodations if the delay extends overnight. For delays of over five hours, the airline is also required to offer the option of a refund of the cost of the unused ticket. This legislation has had no material financial impact on the Company to date; however, there can be no assurance that the Company will not incur a significant increase in costs in the future due to the impact of this legislation, if Ryanair experiences an increase in cancelled flights, which could occur as a result of factors beyond its control.

Implementation of the Montreal Convention for Lost, Damaged or Delayed Luggage Could Also Increase Costs. The Montreal Convention on the Unification of Certain Rules for International Air Carriage was adopted in May 1999. The Convention consolidated, updated and has replaced all previous agreements on air carrier liability, including the 1929 Warsaw Convention. The Convention came into force in all EU countries on June 28, 2004. Passengers can now claim up to 1,000 Special Drawing Rights (“SDRs”) (currently approximately €1,037) for lost, damaged or delayed luggage. Passengers submitting baggage claims will have to provide evidence to back up these claims. This compares to the previous weight-based compensation system under the 1929 Warsaw Convention, which limited liability for lost, damaged or delayed luggage to 17 SDRs (currently approximately €18) per kilogram of checked hold baggage.

Although Ryanair has a record of losing fewer bags than many other major European carriers, and the Convention’s coming into force has had no material impact on the Company to date, there can be no assurance that the Company will not incur a significant increase in costs in connection with lost baggage, which could have an adverse effect on the Company’s operating costs and in turn reduce its profitability.

Proposed Regulation of Emissions Trading Could Increase Costs. On July 8, 2008, the European Parliament voted in favor of proposed legislation to add aviation to the European Emissions Trading Scheme. This scheme, which has thus far applied mainly to energy producers, is a cap-and-trade system for carbon emissions to encourage industries to reduce their CO2 emissions. Under the proposed legislation, airlines would be granted initial credits based on historical emissions and their shares of the total aviation market. Any shortage of credits will have to be purchased in the open market. The cost and amount of such credits that Ryanair would have to buy in 2012 have yet to be determined. The proposed legislation still needs to be approved by the European Council of Ministers, which is not likely to happen before October 2008. Should this legislation be passed in its current form, it is likely to have a seriously negative impact on the European airline industry, including Ryanair, despite the fact that Ryanair is the most environmentally efficient producer. The European aviation industry is currently lobbying the Council of Ministers to amend or scrap the legislation as much higher oil prices will result in capacity being removed from the market, thus lowering CO2 emissions. Ryanair and other European airlines also argue that the legislation will have little or no impact on the environment but will simply increase the cost of travelling and reduce passenger volumes. If the legislation is approved, there can be no assurance that Ryanair will be able to obtain sufficient carbon credits, or that the cost of the credits will not have an material adverse effect on the Company’s business, operating results and financial condition.

The Company is Dependent on the Continued Acceptance of Low-fares Airlines.In past years, accidents or other safety-related incidents involving certain low-fares airlines have had a negative impact on the public’s acceptance of such airlines. Any adverse event potentially relating to the safety or reliability of low-fares airlines (including accidents or negative reports from regulatory authorities) could adversely impact the public’s perception of, and confidence in, low-fares airlines like Ryanair, and could have a material adverse effect on the Company’s financial condition and results of operations.Industry” below.

The 2001 Terrorist Attacks on the United States Had a Severe Negative Impact on the International Airline Industry. The terrorist attacks on the United States on September 11, 2001, in which four commercial aircraft were hijacked, had a severe negative impact on the international airline industry, particularly on U.S. carriers and carriers operating international service to and from the U.S.United States. Although carriers such as Ryanair that operate primarily or exclusively in Europe havewere generally been spared from such material adverse impacts on their businesses, to date, the cost to all commercial airlines of insurance coverage for certain third-party liabilities arising from “acts of war” or terrorism has increased dramatically sinceafter the September 11 attacks. See “Item 4. Information on the Company—Insurance.” In addition, Ryanair’s insurers have indicated that the scope of the Company’s current act-of-war-related“act of war”-related insurance may exclude certain types of catastrophic incidents, such as certain forms of biological, chemical or “dirty bomb” attacks. This could result in the Company’s seeking alternative coverage, including government insurance or self-insurance, which could lead to further increases in costs. Although Ryanair to date has passed on the increased insurance costs to passengers by means of a special “insurance levy” on each ticket, there can be no assurance that it will continue to be successful in doing so. In response to the dramatic drop in revenue and expected increases in costs, airlines in the U.S. and certain European carriers with significant U.S. operations have sought, and in certain cases, already received, governmental assistance in the form of financial aid. Ryanair does not fly to the United States, and although it experienced a decline of approximately 10% in reservations in the week following the September 11, 2001 terrorist attacks, the number of flight bookings had returned to normal levels by the end of September 2001.

Because a substantial portion of airline travel (both business and personal) is discretionary and because Ryanair is substantially dependent on discretionary air travel, any prolonged general reduction in airline passenger traffic may adversely affect the Company. Similarly, any significant increase in expenses related to security, insurance or related costs could have a material adverse effect on the Company. Any further terrorist attacks in the U.S. or in Europe, particularly in London or other markets that are significant to Ryanair, any significant military actions by the United States or EU nations (such as the current war in Iraq) or any related economic downturn would be likely tomay have a material adverse effect on demand for air travel and thus on Ryanair’s business, operating results, and financial condition. See also “—Risks Related to the Company—Further Terrorist Attacks in London and Other Destinations Could Have a Detrimental Effect on the Company.”

The Company Faces the Risk of Loss and Liability. Ryanair is exposed to potential catastrophic losses that may be incurred in the event of an aircraft accident or terrorist incident. Any such accident or incident could involve costs related to the repair or replacement of a damaged aircraft and its consequent temporary or

permanent loss from service. In addition, an accident or incident could result in significant legal claims against the Company from injured passengers and others who experienced injury as a result of the accident or incident, including ground victims. Ryanair currently maintains passenger liability insurance, employer liability insurance, aircraft insurance for aircraft loss or damage, and other business insurance in amounts per occurrence that are consistent with industry standards.

Ryanair currently believes its insurance coverage is adequate (although not comprehensive). However, there can be no assurance that the amount of insurance coverage will not need to be increased, that insurance premiums will not increase significantly, or that Ryanair will not be forced to bear substantial losses from any accidents not covered by its insurance. Airline insurance costs increased dramatically following the September 2001 terrorist attacks on the United States. See “—The 2001 Terrorist Attacks on the United States Had a Severe Negative Impact on the International Airline Industry” above. Substantial claims resulting from an accident in excess of related insurance coverage could have a material adverse effect on the Company’s results of operations and financial condition. Moreover, any aircraft accident, even if fully insured, could lead to the public perception that Ryanair’s aircraft were less safe or reliable than those operated by other airlines, which could have a material adverse effect on Ryanair’s business.

EU Regulation No. 2027/97, as amended by Regulation No. 889/2002, governs air carrier liability. See “Item 4. Information on the Company—Insurance” for details of this regulation. This regulation increased the potential liability exposure of air carriers such as Ryanair, and althoughRyanair. Although Ryanair has extended its liability insurance

to meet the requirements of the regulation, no assurance can be given that other laws, regulations, or policies will not be applied, modified or amended in a manner that has a material adverse effect on Ryanair’s business, operating results, and financial condition.

Airline Industry Margins are Subject to Significant Uncertainty.The airline industry is characterized by high fixed costs and by revenues that generally exhibit substantially greater elasticity than costs. Although fuel accounted for 36.4%34.1% of total costsoperating expenses (excluding de-icing costs) in the 20082010 fiscal year, management anticipates that this percentage willmay vary significantly increase.in future years. See “—Changes in Fuel Costs and Fuel Availability Affect the Company’s Results and Increase the Likelihood that the Company May Incur Losses” above. The operating costs of each flight do not vary significantly with the number of passengers flown, and therefore, a relatively small change in the number of passengers, or in fare pricing, or traffic mix could have a disproportionate effect on operating and financial results. Accordingly, a relatively minor shortfall from expected revenue levels could have a material adverse effect on the Company’s growth or financial performance. See “Item 5. Operating and Financial Review and Prospects.” The very low marginal costs incurred for providing services to passengers occupying otherwise unsold seats are also a factor in the industry’s high susceptibility to price discounting. See “—The Company Faces Significant Price and Other Pressures in a Highly Competitive Environment” above.

Safety-Related Undertakings Could Affect the Company’s Results.Results. Aviation authorities in Europe and the United States periodically require or suggest that airlines implement certain safety-related procedures on their aircraft. In recent years, the U.S. Federal Aviation Administration (the “FAA”) has required a number of such procedures with regard to Boeing 737737-800 aircraft, including checks of rear pressure bulkheads and flight control modules, redesign of the rudder control system, and limitations on certain operating procedures. Ryanair’s policy is to implement any such required procedures in accordance with FAA guidance and to perform such procedures in close collaboration with Boeing. To date, all such procedures have been conducted as part of Ryanair’s standard maintenance program and have not interrupted flight schedules ornor required any material increases in Ryanair’s maintenance expenses. However, there can be no assurance that the FAA or other regulatory authorities will not recommend or require other safety-related undertakings or that such undertakings would not adversely impact the Company’s operating results or financial condition.

There also can be no assurance that new regulations will not be implemented in the future that would apply to Ryanair’s aircraft and result in an increase in Ryanair’s cost of maintenance or other costs beyond management’s current estimates. In addition, should Ryanair’s aircraft cease to be sufficiently reliable or should any public perception develop that Ryanair’s aircraft are less than completely reliable, the Company’s business could be materially adversely affected.

Currency Fluctuations Affect the Company’s Results.Results. Although the Company is headquartered in Ireland, a significant portion of its operations is conducted in the U.K. Consequently, the Company has significant operating revenues and operating expenses, as well as assets and liabilities, denominated in U.K. pounds sterling. In addition, fuel, aircraft, insurance, and some maintenance obligations are denominated in U.S. dollars. The Company’s results of operations and financial condition can therefore be significantly affected by fluctuations in the respective values of the U.K. pound sterling and the U.S. dollar. Ryanair is particularly subject to direct exchange rate risks between the euro and the U.S. dollar because a significant portion of its operating costs are incurred in U.S. dollars and none of its revenues are denominated in U.S. dollars.

Although the Company

engages in foreign currency hedging transactions between the euro and the U.S. dollar, between the euro and the U.K. pound sterling, and between the U.K. pound sterling and the U.S. dollar, hedging activities cannot be expected to eliminate currency risks. See “Item 11. Quantitative and Qualitative Discussion About Market Risk.”

Risks Related to Ownership of the Company’s Ordinary Shares or ADRs

EU Rules Impose Restrictions on the Ownership of Ryanair Holdings’ Ordinary Shares by Non-EU Nationals, and the Company Has Instituted a Ban on the Purchase of Ordinary Shares by Non-EU Nationals.EU Regulation No. 2407/921008/2008 requires that, in order to obtain and retain an operating license, an EU air carrier must be majority-owned and effectively controlled by EU nationals. The regulation does not specify what level of share ownership will confer effective control on a holder or holders of shares. The board of directors of Ryanair Holdings is given certain powers under Ryanair Holdings’ articles of association (the “Articles”) to take action to ensure that the number of shares held in Ryanair Holdings by non-EU nationals (“Affected Shares”) does not

reach a level that could jeopardize the Company’s entitlement to continue to hold or enjoy the benefit of any license, permit, consent, or privilege which it holds or enjoys and which enables it to carry on business as an air carrier. The directors, will, from time to time, set a “Permitted Maximum” on the number of the Company’s Ordinary Shares that may be owned by non-EU nationals at such level as they believe will comply with EU law. The Permitted Maximum is currently set at 49.9%. In addition, under certain circumstances, the directors can take action to safeguard the Company’s ability to operate by identifying those shares, American Depositary Shares (“ADSs”) or Affected Shares which give rise to the need to take action and treat such shares, the American Depositary Receipts (“ADRs”) evidencing such ADSs, or Affected Shares as “Restricted Shares.” The Board of Directors may, under certain circumstances, deprive holders of Restricted Shares of their rights to attend, vote at, and speak at general meetings, and/or require such holders to dispose of their Restricted Shares to an EU national within as little as 21 days. The directors are also given the power to transfer such shares themselves if a holder fails to comply. In 2002, the Company implemented measures to restrict the ability of non-EU nationals to purchase Ordinary Shares, and non-EU nationals are currently effectively barred from purchasing Ordinary Shares, and will remain so for as long as these restrictions remain in place. There can be no assurance that these restrictions will ever be lifted. See “Item 10. Additional Information—Limitations on Share Ownership by Non-EU Nationals” for a detailed discussion of the restrictions on share ownership and the current ban on share purchases by non-EU nationals.

As of June 30, 2008,2010, EU nationals owned at least 56.0%53.6% of Ryanair Holdings’ Ordinary Shares (assuming conversion of all outstanding ADRs into Ordinary Shares).

Holders of Ordinary Shares are Currently Unable to Convert those Shares into American Depositary Receipts.Receipts. In an effort to increase the percentage of its share capital held by EU nationals, on June 26, 2001, Ryanair Holdings instructed The Bank of New York Mellon, the depositary for its ADR program (the “Depositary”), to suspend the issuance of new ADRs in exchange for the deposit of Ordinary Shares until further notice to its shareholders.notice. Holders of Ordinary Shares cannot convert their Ordinary Shares into ADRs during this suspension, and there can be no assurance that the suspension will ever be lifted. See also “—EU Rules Impose Restrictions on the Ownership of Ryanair Holdings’ Ordinary Shares by Non-EU nationals and the Company has Instituted a Ban on the Purchase of Ordinary Shares by Non-EU Nationals” above.

The Company’s Results of Operations May Fluctuate Significantly.Significantly. The Company’s results of operations have varied significantly from quarter to quarter, and management expects these variations to continue. See “Item 5. Operating and Financial Review and Prospects—QuarterlySeasonal Fluctuations.” Among the factors causing these variations are the airline industry’s sensitivity to general economic conditions, and the seasonal nature of air travel, as well asand trends in airlines’ costs, and especially fuel costs. Because a substantial portion of airline travel (both business and personal) is discretionary, the industry tends to experience adverse financial results during general economic downturns. The Company is substantially dependent on discretionary air travel.

The trading price of Ryanair Holdings’ Ordinary Shares and ADRs may be subject to wide fluctuations in response to quarterly variations in the Company’s operating results and the operating results of other airlines. In addition, the global stock markets from time to time experience extreme price and volume fluctuations that affect the market prices of many airline company stocks. These broad market fluctuations may adversely affect the market price of the Ordinary Shares and ADRs.

Ryanair Holdings DoesMay or May Not Intend to Pay Dividends.Since its organizationincorporation as the holding company for Ryanair in 1996, Ryanair Holdings has not declared or paid dividends on its Ordinary Shares, and does not

anticipate paying any cash or share dividendsShares. However, the directors of Company declared on June 1, 2010 that Ryanair Holdings intends to pay a special dividend of €500 million, to be paid in October 2010, subject to shareholder approval at its Ordinary Sharesannual general meeting on September 22, 2010. The Company also indicated in the foreseeable future.same announcement that it may pay a further dividend of up to €500 million before the end of fiscal year 2013, subject to, amongst other things, its continued profitability and the absence of further aircraft purchases or any other significant capital expenditures. The Company may ultimately determine not to pay any such dividend, or may fail to obtain shareholder approval. The Company may pay other dividends from time to time, or it may not pay any dividends at all, as has been its practice to date. No assurances can be given that the Company will, or will not, pay dividends. See “Item 8. Financial Information—Other Financial Information—Dividend Policy.” As a holding company, Ryanair Holdings does not have any material assets other than interests in the shares of Ryanair.

INTRODUCTION

Ryanair Holdings was incorporated in 1996 as a holding company for Ryanair Limited. The Companylatter operates a low-fares, scheduled passengerscheduled-passenger airline serving short-haul, point-to-point routes between Ireland, the U.K., Continental Europe, and Morocco. Incorporated in 1984, Ryanair Limited began to introduce a low-fares operating model under a new management team in the early 1990s. See “Item 5. Operating and Financial Review and Prospects—History.” At June 30, 2008,2010, with its operating fleet of 166 new250 Boeing 737-800 “next generation” aircraft, Ryanair Limited offered more than 1,100approximately 1,300 scheduled short-haul flights per day serving 147 locations155 airports throughout Europe and Morocco, including 26 in the U.K. and Ireland.Morocco. See “—Route System, Scheduling and Fares—Route System and Scheduling” for more details of Ryanair’s route network. See “Item 5. Operating and Financial Review and Prospects—Seasonal Fluctuations” for information about the seasonality of Ryanair’s business. Ryanair Holdings was incorporated in 1997 as a holding company for Ryanair Limited.

Offering widely available low fares, Ryanair booked 49recorded a profit on ordinary activities after taxation of €305.3 million passengers during the 2007 calendar year. On the basis of the U.K. Airports Annual Statement of Movements, Passengers and Cargo (the “CAA Statistics”) published by the Civil Aviation Authority (“CAA”) in the 2007 calendar2010 fiscal year, Ryanair had the leading market share (in termsas compared to a loss on ordinary activities after taxation of passenger volume) on most of its scheduled routes between Ireland and provincial cities€169.2 million in the U.K.2009 fiscal year. This variation was primarily attributable to a 28.9% decrease in fuel costs from €1,257.1 million to €893.9 million, and carried approximately 45.5% of all scheduled passenger traffic between Dublin and London, a share favorably comparable2.0% increase in revenues from €2,942.0 million to the approximately 34.2% share of Aer Lingus, its next largest competitor on the U.K.-Ireland routes. According to the CAA Statistics,€2,988.1 million. Ryanair has also achieved competitive market share results on the routes it has launched from the U.K. to continental Europe from the dates it began service on these routes.

By generatinggenerated an average booked passenger load factor of approximately 82%82.2% and average scheduled passenger yieldrevenues of €0.054€0.067 per ASM and focusingin the 2010 fiscal year. The Company has focused on maintaining low operating costs (€0.0510.047 per ASM), Ryanair achieved a net margin of 18% on total revenues of €2,713.8 millionASM in the 20082010 fiscal year. See “Item 5. Operating and Financial Review and Prospects” and the Glossary in Appendix A.year).

The market’s acceptance of Ryanair’s low-fares service is reflected in the “Ryanair Effect”—Ryanair’s history of stimulating significant annual passenger traffic growth on the new routes on which it has commenced service since 1991. OnFor example, on the basis of the CAA Statistics“U.K. Airports Annual Statement of Movements, Passengers and Cargo” published by the U.K. Civil Aviation Authority and statistics released by the International Civil Aviation Organization (the “ICAO”), the number of scheduled airline passengers traveling between Dublin and London increased from 1.7 million passengers in 1991 to 4.33.96 million passengers in the 20072009 calendar year. Most international routes Ryanair has begun serving since 1991 have recorded significant traffic growth in the period following Ryanair’s commencement of service, with Ryanair capturing the largest portion of such growth on each such route. A variety of factors contributed to this increase in air passenger traffic, including the relative strength of the Irish, U.K., and European economies.economies in past years. However, management believes that the most significant factors driving such growth across all its European routes have been Ryanair’s low-fares policy and its superiority to its competitors in terms of flight punctuality, levels of lost baggage, and rates of flight cancellations.

The address of Ryanair Holdings’ registered office is: c/o Ryanair Limited, Corporate Head Office, Dublin Airport, County Dublin, Ireland. The Company’s contact person regarding this Annual Report on Form 20-F is: Howard Millar, Chief Financial Officer (same address as above). The telephone number is +353-1-812-1212 and the facsimile number is +353-1-812-1213. Under its current Articles, of Association, Ryanair Holdings has an unlimited corporate duration.

STRATEGY

Ryanair’s objective is to firmly establish itself as Europe’s leading scheduled passenger airline, through continued improvements and expanded offerings of its low-fares service. In the highly challenging current operating environment, Ryanair seeks to offer low fares that generate increased passenger traffic while maintaining a continuous focus on cost-containment and operating efficiencies. The key elements of Ryanair’s long-term strategy are:

Low Fares.Ryanair’s low fares are designed to stimulate demand, particularly from fare-conscious leisure and business travelers who might otherwise use alternative forms of transportation or choose not to travel at all.

Ryanair sells seats on a one-way basis, thus eliminating minimum stay requirements from all travel on Ryanair scheduled services. Ryanair sets fares on the basis of the demand for particular flights and by reference to the period remaining to the date of departure of the flight, with higher fares charged on flights with higher levels of demand and for bookings made nearer to the date of departure. Ryanair also periodically runs special promotional fare campaigns. See “—Route System, Scheduling and Fares—Low and Widely Available Fares” below.

Customer Service.Ryanair’s strategy is to deliver the best customer service performance in its peer group. According to reports bythe data available from the Association of European Airlines (“AEA”) and the airlines’ own published statistics, Ryanair has achieved better punctuality, fewer lost bags, and fewer cancellations than all of the rest of its peer group in Europe. Ryanair achieves this by focusing strongly on the execution of these services and by primarily operating from un-congested airports. Ryanair conducts a daily conference call with Ryanair and airport personnel at each of its base airports, during which the reasons for each “first wave” flight delay and baggage short-shipment are discussed in detail and logged to ensure that the root cause is identified and rectified. Subsequent (consequential) delays and short shipments are investigated by Ryanair ground operations personnel. Customer satisfaction is also measured by regular online, mystery passengermystery-passenger and employee surveys.

Frequent Point-to-Point Flights on Short-Haul Routes. Ryanair provides frequent point-to-point service on short-haul routes to secondary and regional airports in and around major population centers and travel destinations. In the 20082010 fiscal year, Ryanair flew an average route length of 662 kilometers661 miles and an average flight duration of approximately 1.571.55 hours. Short-haul routes allow Ryanair to offer its low fares and frequent service, while eliminating the need to provide unnecessary “frills”,“frills,” like in-flight meals and movies, otherwise expected by customers on longer flights. Point-to-point flying (as opposed to hub-and-spoke service) allows Ryanair to offer direct, non-stop routes and avoid the costs of providing “through service”service,” for connecting passengers, including baggage transfer and transit passenger assistance.

In choosing its routes, Ryanair favors secondary airports with convenient transportation to major population centers and regional airports. Secondary and regional airports are generally less congested than major airports and, as a result, can be expected to provide higher rates of on-time departures, faster turnaround times (the time an aircraft spends at a gate loading and unloading passengers), fewer terminal delays, and more competitive airport access, and lower handling costs. Ryanair’s “on time” performance record (arrivals within 15 minutes of schedule) for the 2007 calendar2010 fiscal year was 88%. According to 2007the last available comparative data from Ryanair, Aer Lingus, easyJet andpublished by the AEA (which relates to the 2008-2009 winter season), Ryanair’s “on time” performance record exceeded that of its principal competitors including Aer Lingus (approximately 78%),that make such data available, including: Air France (approximately 82%83%),; British Airways (approximately 65%83%), easyJet; Iberia (approximately 74%70%), and Lufthansa (approximately 81%85%),. Aer Lingus and SAS (approximately 81%).easyJet do not publish punctuality statistics. Faster turnaround times are a key element in Ryanair’s efforts to maximize aircraft utilization. Ryanair’s average scheduled turnaround time for the 20082010 fiscal year was approximately 25 minutes. Secondary and regional airports also generally do not maintain slot requirements or other operating restrictions that can increase operating expenses and limit the number of allowed take-offs and landings.

Low Operating Costs. Management believes that Ryanair’s operating costs are among the lowest of any European scheduled passengerscheduled-passenger airline. Ryanair strives to reduce or control four of the primary expenses involved in running a major scheduled airline: (i) aircraft equipment costs; (ii) personnel costs; (iii) customer service costs; and (iv) airport access and handling costs:

Aircraft Equipment Costs. Ryanair’s primary strategy for controlling aircraft acquisition costs is to narrow its fleet of aircraft tooperate a single aircraft type. Ryanair currently operates only “next generation” Boeing 737-800s. Ryanair’s continuous acquisition of thenew Boeing 737-800s has already and willis expected to continue to significantly increase the size of its fleet and thus significantly increase its aircraft equipment and related costs (on an aggregate basis). However, the purchase of aircraft from a single manufacturer enables Ryanair to limit the costs associated with personnel training, maintenance, and the purchase and storage of spare parts while also affording the Company greater flexibility in the scheduling of crews and equipment. Management also believes that the terms of itsRyanair’s contracts with Boeing contracts are very favorable to Ryanair. See “—Aircraft” below for additional information on Ryanair’s fleet.

Personnel Costs. Ryanair endeavors to control its labor costs by seeking to continually improve the productivity of its already highly productive work force. Compensation for employees emphasizes productivity-based pay incentives. These incentives include discretionary sales bonusescommissions for onboard sales of products for flight attendants and payments based on the number of hours or sectors flown by pilots and flight attendants within limits set by industry standards or regulations fixing maximum working hours.

Customer Service Costs. Ryanair has entered into agreements on competitive terms with third-partyexternal contractors at certain airports for ticketing, passenger and aircraft handling, and other services that

management believes can be more cost-efficiently provided by third parties. Management attempts to obtain competitive rates for such services by negotiating fixed-price, multi-year contracts. The development of its own Internet booking facility and reservations center has allowed Ryanair to eliminate travel agent commissions.commissions and third-party reservation systems costs. Ryanair generates virtually allover 99% of its scheduled passenger revenues through direct sales via its website.

Airport Access and Handling Costs. Ryanair attempts to control airport access and service charges by focusing on airports that offer competitive prices. Management believes that Ryanair’s record of delivering a consistently high volume of passenger traffic growth at many airports has allowed it to negotiate favorable contracts with such airports for access to their facilities. Ryanair further endeavors to reduce its airport charges by opting, when practicable, for less expensive gate locations as well as outdoor boarding stairs, rather than jetways, which are more expensive jetways.and operationally less efficient to use. In addition, since October 2009, Ryanair has required all passengers to check-in on the Internet. This requirement was instituted to reduce waiting times at airports and speed a passenger’s journey from arrival at the airport to boarding, as well as significantly reduce airport handling costs. Ryanair has also introduced a checked-bag fee, which is payable on the Internet at the time of booking and is aimed at reducing the number of bags carried by passengers in order to further reduce handling costs.

Taking Advantage of the Internet.Internet. In 2000, Ryanair converted its host reservation system to a new system, called Flightspeed, which it operates under a 10-year hosting agreement with Navitaire to use its Open Skies reservation system (“Open Skies”).that will terminate in 2013. As part of the implementation of the new reservation system, Open SkiesNavitaire developed an Internet booking facility called Skylights.facility. The Ryanair system allows Internet users to access its host reservation system and to make and pay for confirmed reservations in real time through Ryanair’sthe Ryanair.com website. SinceAfter the launch of the SkylightsInternet reservation system, Ryanair has heavily promoted its website through newspaper, radio and television advertising. As a result, Internet bookings grew rapidly, and have grown rapidly, accountingaccounted for approximatelyover 99% of all reservations on a daily basis as of June 2008. On February 22,over the past several years. In 2008, Ryanair upgraded from the Open Skies reservation system to the New Skies reservation system because New Skies isa more scalable and will offerversion, which offers more flexibility for future system enhancements and to accommodate the planned growth of Ryanair.

In addition, in March 2006, Ryanair introduced its Internet check-in service Check’N’Go, and, thein October 2009, it made its use mandatory. The Company plans to introduce a kiosk-basedtherefore replaced its previous airport check-in systemsfacilities with significantly fewer bag-drop desks. The Company has also deployed kiosks with payment facilities at most of its main base at London Stansted in August 2008.bases. See “Risk Factors—Risks Related to the Company—The Company Faces Risks Related to its Internet Reservations Operations and its Announced Elimination of Airport Check-in Facilities.”

Commitment to Safety and Quality Maintenance. Safety is the primary priority of Ryanair and its management. This commitment begins with the hiring and training of Ryanair’s pilots, flight attendants, and maintenance personnel and includes a policy of maintaining its aircraft in accordance with the highest European airline industry standards. Ryanair has not had a single incident involving major injury to a passenger or a member of its flight crew fatality in its 23-year25-year operating history. Although Ryanair seeks to maintain its fleet in a cost-effective manner, management does not seek to extend Ryanair’s low-cost operating strategy to the areas of safety, maintenance, training or quality assurance. Routine aircraft maintenance and repair services are performed primarily by Ryanair, at Ryanair’s main bases, but are also performed at other base airports by maintenance contractors approved under the terms of Part 145. Ryanair currently performs heavy airframe maintenance, but contracts with other parties who perform heavy airframe maintenance, engine overhaul services and rotable repairs. These contractors also provide similar services to a number of other airlines, including British Airways, Finnair and Aer Lingus.Iberia. Ryanair assigns a Part 145 certified145-certified mechanic to oversee heavy maintenance and authorize engine overhauls performed by other parties.

Enhancement of Operating Results through Ancillary Services. Ryanair provides various ancillarydistributes accommodation services and engages in other activities connected with its core air passenger service, including non-flight scheduled services, the in-flight sale of beverages, food and merchandise and Internet-related services. As part of its non-flight services, Ryanair distributes accommodation, travel insurance and car rentals, principallyprimarily through its website. Management believesFor hotel services, Ryanair has a contract with Booking.com, pursuant to which Booking.com handles all aspects of such services marketed through Ryanair’s website and pays a fee to Ryanair. Ryanair also has contracts with other accommodation providers that providing these services through the Internet allowsenable Ryanair to increase sales, while atoffer camping, hostel, bed-and-breakfast, guesthouse, villa and apartment accommodation to its customers. In addition Ryanair has a contract with the same time reducing costs onHertz Corporation (“Hertz”), pursuant to which Hertz handles all car rental services marketed through Ryanair’s website or telephone reservation system. Hertz pays a per-unit basis.

per-passenger fee to Ryanair. Ryanair also sells cruises online and bus and rail tickets onboard its aircraft and through its website. Costa Cruises handles all cruise bookings made via Ryanair’s website and pays Ryanair a per-passenger fee. For the 20082010 fiscal year, ancillary services accounted for 18.0%22.2% of Ryanair’s total operating revenues, as compared to 16.2%20.3% of such revenues in the 20072009 fiscal year. See “—Ancillary Services” below and “Item 5. Operating and Financial Review and Prospects—Results of Operations—Fiscal Year 20082010 Compared with Fiscal Year 2007—2009—Ancillary Revenues” for additional information.

Focused Criteria for Growth. Building on its success in the Ireland-U.K. market and its expansion of service to continental Europe and Morocco, Ryanair intends to follow a manageable growth plan targeting specific markets. Ryanair believes it will have opportunities for continued growth by: (i) initiating additional routes in the EU; (ii) initiating additional routes in countries party to a European Common Aviation Agreement with the EU that are currently served by higher-cost, higher-fare carriers; (iii) increasing the frequency of service on its

existing routes; (iv) starting new domestic routes within individual EU countries; (v) considering acquisition opportunities that may become available in the future; (vi) connecting airports within its existing route network (“triangulation”); (vi)(vii) establishing new bases in continental Europe;bases; and (vii)(viii) initiating new routes not currently served by any carrier.

During the 2007 fiscal year, the Company acquired 25.2% of Aer Lingus. The Company thereafter increased its interest to 29.3% during the 2008 fiscal year, and to 29.8% during the 2009 fiscal year at a total aggregate cost of €407.2 million. Following the acquisition of its initial stake and upon the approval of the Company’s shareholders, approved the decisionmanagement proposed to purchaseeffect a tender offer to acquire the entire share capital of Aer Lingus and, as a result, Ryanair has acquired a 29.8% interest at a cost of €403.0 million, as of July 3, 2008. The Company’s proposed tender offer for all of the shares of Aer LingusLingus. This acquisition proposal was, however, blocked by the European Commission on alleged competition grounds. Ryanair has filed an appeal with the CFI, which was heard in July 2009. On July 6, 2010, the Court upheld the Commission’s decision. Ryanair has two months and 10 days from such date to appeal this judgment.

On December 1, 2008, Ryanair made a second offer to acquire all of the European Commission’s decision withordinary shares of Aer Lingus it did not own at a price of €1.40 per ordinary share. Ryanair offered to keep Aer Lingus as a separate company, maintain the CFI. Aer Lingus brand, and retain its Heathrow slots and connectivity. Ryanair also proposed to double Aer Lingus’ short-haul fleet from 33 to 66 aircraft and to create 1,000 associated new jobs over a five-year period. If the offer had been accepted, the Irish government would have received over €180 million in cash. The employee share option trust and employees who own 18% of Aer Lingus would have received over €137 million in cash. The Company met Aer Lingus management, representatives of the employee share option trust and other parties, including the Irish Government. The offer of €1.40 per share represented a premium of approximately 25% over the closing price of €1.12 of Aer Lingus on November 28, 2008. However, as the Company was unable to secure the shareholders’ support (to sell their stakes in Aer Lingus to Ryanair), the Company decided on January 28, 2009, to withdraw its offer for Aer Lingus.

See “Item 8. Financial Information—Other Financial Information—Legal Proceedings—Aer Lingus Merger Decision.”

Responding to Current Challenges. In recent periods, and with increased effect in the 2008, 2009 and 2010 fiscal year,years, Ryanair’s low-cost, low-fares model has faced substantial pressure due to significantly increased fuel costs and general inflation and reduced economic growth (or economic contraction) in the economies in which it operates. The Company aimshas aimed to meet these challenges byby: (i) selectively grounding aircraft including 20 aircraft thatduring the Company intends to ground over the 2008-20092009-2010 winter season; (ii) disposing of aircraft (increasing its disposals from six(disposals totaled 6 in the 2008 fiscal year, to approximately 17 in the 2009 fiscal year;year and 3 in the 2010 fiscal year); (iii) controlling labor and other costs, including through wage freezes, selective redundancies and selective redundancies.the introduction of Internet check-in; and (iv) renegotiating contracts with existing suppliers, airports and handling companies. There can be no assurance that the Company will be successful in doing these thingsachieving all of the foregoing or taking other similar measures, or that doing so will allow the Company earn profits in any period. See “Item 3. Key Information—Risk Factors—Risks Related to the Company—Changes in Fuel Costs and Fuel Availability Affect the Company’s Results and Increase the Likelihood that the Company May Incur Losses” and “—The Company May Not Be Successful in Raising Fares to Offset Increased Business Costs.”

The companyCompany has recently announced capacity reductions, primarily at Dublin and London (Stansted) airports,Airport, the two most expensive airportsairport in terms of airport charges that Ryanair serves. As a result of these airports’this airport’s high charges, certain routes are not economically viable to operate during the winter when the companyCompany typically experiences lower load factors and fares. Accordingly,In June 2009, Ryanair announced that it was reducing its fleet at Dublin Airport to 17 by summer 2009, 16 by winter 2009, 15 by summer 2010 and 12 by winter 2010 (down from 22 in summer 2008 and 20 in winter 2008), as a result of rising airport charges and the companyintroduction of an Air Travel Tax of €10 on all passengers departing from Irish airports on routes longer than 300 kilometers. Excluding the planned reduction by winter 2010, these reductions have been carried out. The Company has announcedalso frozen growth in the United Kingdom with the exception of launching a base at Leeds Bradford. Ryanair reduced capacity at its intentionLondon (Stansted) base by 40% between October 2009 and March 2010. In addition, on June 29, 2010, due to ground 15 aircraftthe continuance of the U.K. government’s £11 APD tourist tax and high charges at London (Stansted) airport, the Company announced that capacity at London (Stansted) airport would be reduced from winter 2010 by 17% and the number of aircraft based at London (Stansted) would be reduced from 24 to 22. Ryanair also noted that, as a result of other capacity reductions at its U.K. bases except for the bases at Edinburgh and Leeds Bradford, its total U.K. capacity would fall by 16% in the period from November 1, 2008 through2010 to March 31, 2009 (last year 2011. See “Risk Factors—Risks Related to the Company—Ryanair grounded 7 aircraft duringHas Decided to Freeze its Development in the winter)U.K. Market and a further four aircraft at Dublin airport during the same period.Curtail Certain U.K. Operations.”

In addition the company has also announced that from November 1, 2008 to December 19th, 2008, it will close its base at Valencia. Furthermore, Ryanair has announced that it will temporarily suspend services to Budapest, Basel, Palma, Salzburg, Krakow and Rzeszow this winter. As a result of these capacity reductions, Ryanair expects that total passengers booked this year will rise by approximately 14%, bringing the total number of passengers booked to approximately 58 million, lower than the 16% growth, or 59 million booked passengers, previously forecast.

ROUTE SYSTEM, SCHEDULING AND FARES

Route System and Scheduling

As of June 30, 2008,2010, the Company offers over 1,100offered approximately 1,300 scheduled short-haul flights per day serving 147 locations155 airports throughout Europe and Morocco, including 26 locations in the U.K. and Ireland, and flying approximately 7121,100 routes.

The following table lists Ryanair’s top ten routes during the 20082010 fiscal year by number of passengers, includingas well as the date service commenced on each such route and how many round-trip flights are scheduled on each such route per day.route. These routes in the aggregate accounted for 10.5%7.1% of the Company’s scheduled passenger volume in the 20082010 fiscal year.

See Note 17, “Analysis of operating revenues and segmental analysis,” to the consolidated financial statements included in Item 18 for more information regarding the geographical sources of the Company’s revenue.

Management’s objective is to schedule a sufficient number of flights per day on each of Ryanair’s routes to satisfy demand for Ryanair’s low-fares service. Ryanair schedules departures on its most popular routes at frequent intervals, normally between approximately 6:00 a.m. and 11:00 p.m. Management regularly reviews the need for adjustments in the number of flights on all of its routes.

During the 20082010 fiscal year, Ryanair announced 201356 new routes and added destinations in two new countries, Switzerland and Romania, which are serviced by routes originating in the U.K.,from Belgium, France, Germany, Ireland, Italy, Lithuania, Malta, Norway, Portugal, Slovakia, Spain, Sweden and Italy.the U.K. See “Risk Factors—Risks Related to the Company—Ryanair Has Decided to Freeze its Development in the U.K. Market and Curtail Certain U.K. Operations.”

Low and Widely Available Fares

Ryanair offers low fares, with prices generally varying on the basis of advance booking, seat availability and demand. Ryanair sells seats on a one-way basis, thus removing minimum stay requirements from all travel on Ryanair scheduled services. All tickets can be changed, subject to certain conditions, including fee payment and applicable upgrade charges. However, tickets are non-cancelable and non-refundable and must be paid for at the time of reservation.

Ryanair’s discounted fares are “capacity controlled” in that Ryanair allocates a specific number of seats on each flight to each fare category to accommodate projected demand for seats at each fare level leading up to flight time. Ryanair generally makes its lowest fares widely available by allocating a majority of its seat inventory to its lowest fare categories. Management believes that its unrestricted fares as well as its advance-purchase fares are attractive to both business and leisure travelers.

When launching a new route, Ryanair’s policy is to price its lowest fare so that it will be significantly lower than other carriers’ lowest fares, but still provide a satisfactory operating margin.

Ryanair also periodically runs special promotional fare campaigns, in particular in connection with the opening of new routes, and endeavors to always offer the lowest fare on any route it serves. Ryanair offers weekday one-way fares starting at €1 on many of its routes, and offers lower-fare trips on certain routes from time to time. Promotional fares may have the effect of increasing load factors and reducing Ryanair’s yield and passenger revenues on the relevant routes during the periods they are in effect. Ryanair expects to continue to offer significant fare promotions to stimulate demand in periods of lower activity or during off-peak times for the foreseeable future.

MARKETING AND ADVERTISING

Ryanair’s primary marketing strategy is to emphasize its widely available low fares and price guarantee. In doing so, Ryanair primarily advertises its services in national and regional newspapers, as well as through controversial and topical advertising, press conferences and publicity stuntsstunts. Other marketing activities include the distribution of advertising and promotional material and cooperative advertising campaigns with other travel-related entities, including local tourist boards. Ryanair also regularly contacts people registered in its database to inform them about promotions and special offers via e-mail.

RESERVATIONS ON RYANAIR.COM

Passenger airlines generally rely on travel agents (whether traditional or online) for a significant portion of their ticket sales and pay travel agents a commissioncommissions for their services. Followingservices, as well as reimbursing them for the introduction of its Internet-based reservations and ticketing service, which now allowsfees charged by reservation systems-providers. In contrast, Ryanair requires passengers to make reservations and purchase tickets directly through the Company’sCompany. Over 99% of such reservations and purchases are made through the website Ryanair’s relianceRyanair.com. Ryanair is therefore not reliant on travel agents has been eliminated.agents. See “—Strategy—Taking Advantage of the Internet” above for additional information.

On February 22,In 2008, Ryanair upgraded from the Open Skiesits reservation system to the New Skies reservation system. The upgrade to New Skies was required in order to facilitate the continued expansion of the airline. The existing Open Skiesprior reservation system had been developed in the 1990s and was approaching its capacity in terms of the total number of passenger transactions processed each year. The New Skiesupgraded system is much more scalable and will be able to cope with the planned growth of Ryanair. In addition, New Skies willthe new system also givegives the Company the ability to offer more enhancements to passengers, as the new platform is far more flexible in terms of future development.

Similar to our previous Open Skies agreement, under Under the agreement with the system-provider, Navitaire, the New Skies system will serveserves as Ryanair’s core seating inventory and booking system. In return for access to these system functions, Ryanair will paypays transaction fees that are generally based on the number of passenger seat journeys booked through the system. As part of the transition to New Skies, Navitaire will retainalso retains a back-up booking engine to support its existing operations in the event of a breakdown in the main New Skies system. Over the last several years, Ryanair has introduced a number of Internet-based customer service enhancements such as Internet check-in and priority boarding service. Since October 2009, Ryanair has required Internet check-in for all passengers. These enhancements are focused on reducingand changes have been made to reduce waiting time at airports and speedingspeed a passenger’s journey from arrival at the airport to boarding.boarding, as well as significantly reduce airport handling costs. Ryanair has also introduced a checked-bag fee, and an airport check-in fee, which areis payable on the Internet and areis aimed at reducing the number of bags carried by passengers in order to further reduce ongoing handling costs. As a result of the introduction of the New Skies system, Ryanair intends to continue to deliver further passenger service enhancements by introducing Internet-based facilities to enable passengers to manage their own bookings.

AIRCRAFT

Aircraft

As of June 30, 2008,2010, Ryanair’s operating fleet was composed of 166250 Boeing 737-800 “next generation” aircraft, each having 189 seats. Ryanair’s fleet totaled 163232 Boeing 737-800s at March 31, 2008.2010. The Company expects to have an operating fleet comprising 195272 Boeing 737-800s at March 31, 2009 (assuming that the planned disposal of 17 such aircraft is completed on schedule).2011.

Between March 1999 and June 30, 2008,2010, Ryanair took delivery of 176276 new Boeing 737-800 “next generation” aircraft under its contracts with Boeing (and disposed of ten26 such aircraft). The new Boeing 737-800s share certain basic characteristics with Ryanair’s prior fleet of Boeing 737-200A aircraft, all of which were retired by December 2005. However, the new aircraft are larger (seating up to 189 passengers, as compared to 130 in the Boeing 737-200As), capable of longer flights without refueling, and incorporate more advanced aviation technology. The Boeing 737-800s also comply with Chapter 3 noise reduction requirements established by the ICAO, which took effect in the EU in 2002.

Ryanair entered into a series of agreements with Boeing for Boeing 737-800 “next generation” aircraft starting in 1998. As of January 2005, 89 firm-order aircraft remained to be delivered under those agreements, and the Company had options to purchase an additional 123 aircraft. On February 24, 2005, the Company announced that it had entered into a new agreement with Boeing for the purchase of a further 70 new Boeing 737-800s as well as purchase options for an additional 70 such aircraft.

Under the terms of the 2005 Boeing contract, while the basic price per aircraft that was applicable under the prior contracts continued to apply to the firm-order aircraft that remained to be delivered and purchase options outstanding thereunder, these firm-order and option aircraft became subject to the commercial and other terms applicable to the firm-order aircraft under the 2005 Boeing contract, including benefiting from more favorable price concessions.

In addition, as part of the 2005 contract with Boeing, the Company ensured that “winglets,” or wing-tip extensions, manufactured by Aviation Partners Boeing (“APB”) would be incorporated into all aircraft to be delivered to the Company under its contracts with Boeing from January 2006 onwards. The cost of these winglets is included in the net price of each aircraft. APB agreed to supply the winglets at a discounted rate for all of the Boeing 737-800s delivered to Ryanair prior to January 2006. The cost of retrofitting all of these winglets has beenwas borne by Ryanair and the retrofitting has beenwas carried out during routine maintenance at the Company’s facility at Glasgow (Prestwick). Ryanair has completed the process of installing winglets on all of its existing aircraft and all future aircraft will also be fitted with winglets. The winglets are attached to the existing wings and improve the aerodynamics of the aircraft; as a result, the aircraft consume less fuel per flight-hour. The winglet modification program has proved effective, with better aircraft performance and a reduction of approximately 4% in each aircraft’s consumption of fuel per hour flown.

On December 18, 2009, the Company announced that it was unable to conclude negotiations with Boeing in respect of a new agreement for the purchase of 100 new Boeing 737-800 series aircraft (with an option to purchase an additional 100) for delivery during the period 2013 to 2015. Although the Company had reached agreement with Boeing in relation to the aircraft price it was unable to conclude negotiations regarding other terms and conditions. The Company has no immediate plans to re-commence negotiations with Boeing. With the surplus cash that resulted from unsuccessful negotiations with Boeing, the Company has, subject to shareholder approval, decided to pay a special dividend of €500 million. See “Item 8. Financial Information—Other Financial Information—Dividend Policy.”

Beginning in June 2005, the Company exercised a number of purchase options to acquire new Boeing 737-800 aircraft. The exercise of theseThese exercised purchase options is documentedare detailed in the table below.

Ryanair currently expects to take delivery of an additional 13572 aircraft under its contracts with Boeing.Boeing over the period from June 30, 2010 to March 31, 2013. These deliveries will increase the size of Ryanair’s fleet to 265299 by December 2012March 2013 (assuming that the planned disposal or return (under the terms of 36an operating lease) of 23 such aircraft is completed on schedule), or more should. As of June 30, 2010, Ryanair choose to exercise any of the additional 107 options to purchase aircraft remaining under its existing purchase contracts with Boeing.

Ryanair has entered into agreements with third parties to sellhad sold 25 Boeing 737-800s in accordance with the table below. Ten of these737-800 aircraft have already been delivered.to third parties. Depending on market conditions and various other considerations, Ryanair expects to either dispose of 21 further23 more aircraft (in additionor return such aircraft to thosethe relevant lessor during the period through March 31, 2013. (The foregoing does not take into account an aircraft involved in a bird strike at Rome (Ciampino) airport in November 2008, which has been retained but not repaired and is thus listed as a disposal in the table below) duringon page 51, bringing the periodtotal number of past and future disposals and/or returns to December 2012.49.)

For additional details on the Boeing contracts, scheduled aircraft deliveries and related expenditures and their financing, as well as the terms of the arrangements under which Ryanair currently leases 55 of the aircraft in its operating fleet, see “Item 5. Operating and Financial Review and Prospects—Liquidity and Capital Resources.” Furthermore, following the strengthening of the euro against the Dollar over the last number of years, the absolute cost in euro terms of aircraft has been substantially reduced.

Management believes that the purchase of the additional new Boeing 737-800 aircraft will allow Ryanair to continue to grow over the next fivethree years. Management also believes that the significant size of its orders allowed Ryanair to obtain favorable purchase terms, guaranteed deliveries, and a standard configuration for all of the aircraft it purchased.

The Boeing 737 is the world’s most widely-usedwidely used commercial aircraft and exists in a number of generations, the Boeing 737-800s being the most recent. Management believes that spare parts and cockpit crews qualified to fly these aircraft are likely to be more widely available on favorable terms than similar resources for other types of aircraft. Management believes that its strategy of having reduced its fleet to one aircraft type enables Ryanair to limit the costs associated with personnel training, the purchase and storage of spare parts, and maintenance. Furthermore this strategy affords Ryanair greater flexibility in the scheduling of crews and equipment. The Boeing 737-800s are fitted with CFM 56-7B2656-7B engines and have advanced CAT III Autoland capability, advanced traffic collision avoidance systems, and enhanced ground-proximity warning systems.

At March 31, 2008,2010, the average aircraft age of the Company’s Boeing 737-800 fleet was 2.82.94 years, and no aircraft was more than eight8 years old.

Training and Regulatory Compliance

Ryanair currently owns and operates four Boeing 737-800 full flight simulators for pilot training, the first of which was delivered in 2002. The simulators were purchased from CAE Electronics Ltd. of Quebec, Canada (“CAE”). The second simulator was delivered in 2004, while the third and fourth simulators were delivered in the 2008 fiscal year. In September 2006, Ryanair entered into a new contract with CAE to purchase five B737NG Level B flight simulators. The first two of these simulators are expected to bewere delivered in the 2009 fiscal year.year and are now fully operational. This contract also provides Ryanair with an option to purchase another five such simulators. The gross price of each simulator is approximately $8 million, not taking into account certain price concessions provided by the seller in the form of credit memoranda and discounts.

Management believes that Ryanair is currently in compliance with all applicable regulations and EU directives concerning its fleet of Boeing 737-800 aircraft and will comply with any regulations or EU directives

that may come into effect in the future. However, there can be no assurance that the FAA or other regulatory authorities will not recommend or require other safety-related undertakings that could adversely impact the Company’s results of operations or financial condition. See “Item 3. Key Information—Risk Factors—Safety-Related Undertakings Could Affect the Company’s Results.”

ANCILLARY SERVICES

Ryanair provides various ancillary services and engages in other activities connected with its core air passenger service, including non-flight scheduled services, Internet-related services, and the in-flight sale of beverages, food, and merchandise. See “Item 5. Operating and Financial Review and Prospects—Results of Operations—Fiscal Year 2010 Compared with Fiscal Year 2009—Ancillary Revenues” for additional information.

As part of its non-flight scheduled and Internet-related services Ryanair distributes accommodation services and travel insurance through both its website and its telephone reservation offices. Ryanair also sells bus and rail tickets onboard its aircraft and through its website. Ryanair incentivizesincentivises ground service providers at all of the airports it serves to levy correct excess baggage charges for any baggage that exceeds Ryanair’s published baggage allowances and to collect these charges in accordance with Ryanair’s standard terms and conditions. The Company also charges customers a fixed fee to defray the administrative costs incurred in processing debit and credit card transactions. Since September 20, 2007, all passengers using desk check-in facilities have been required to pay an airport check-in fee (currently set at €5/ £4 per flight).ExcessExcess baggage charges debit and credit transaction processing fees are recorded as components of non-flight scheduled revenue.

Ryanair primarily distributes accommodation services and travel insurance through its website. For hotel services, Ryanair has a contract with Booking.com, pursuant to which Booking.com handles all aspects of such services marketed through Ryanair’s website and pays a fee to Ryanair. Ryanair also has contracts with other accommodation providers that enable Ryanair to offer camping, hostel, bed-and-breakfast, guesthouse, villa and apartment accommodation to its customers. In addition Ryanair has a contract with the Hertz Corporation (“Hertz”), pursuant to which Hertz handles all car rental services purchasedmarketed through Ryanair’s website or telephone reservation system. Hertz pays a per passengerper-passenger fee to Ryanair. For hotel services, Ryanair hasalso sells cruises online and bus and rail tickets onboard its aircraft and through its website. Costa Cruises handles all cruise bookings made via Ryanair’s website and pays Ryanair a fixed fee.

Ryanair sells gift vouchers on its website. Such gift vouchers are also redeemable online. In May 2009, Ryanair started to offer its passengers the possibility of receiving an SMS (text message) when booking, at a fee of £1 or €1, to inform them of their flight confirmation details.

In April 2009, Ryanair signed a contract with Expedia Private Label (“Expedia”),Webloyalty International Ltd, which offers Ryanair’s customers who have a UK, German or French billing address a retail discount and cash-back programme. In February 2009, Ryanair introduced Google Adsense to its search results pages in order to monetize the traffic levels that those pages generate. In March 2009, Ryanair expanded further into the area of third-party Internet advertising with the introduction of third-party display advertising on the homepages in the UK and Ireland.

Ryanair has entered into agreements pursuant to which Expedia handles all aspects of such services and pays a fee to Ryanair.

Management believes that providing these services through the Internet allows Ryanair to increase sales, while at the same time reducing costs on a per-unit basis. Ryanair also has agreements with MBNA and GE Capital Bank (“GE Capital”), both issuers of Visa credit cards. Pursuant to these agreements, RyanairCompany promotes Ryanair-branded credit cards issued by MBNA, GE Money and GE CapitalBanco Santander onboard its aircraft and on its Internet site, and via direct marketing at airports served by Ryanair in the U.K., Ireland, Poland and Sweden.site. The MBNA agreement relates to Irish residents only, the GE Money agreement relates to Swedish and Polish residents only and the GE CapitalBanco Santander agreement relates to UK Swedish and Polish residents only. Ryanair generates revenuesrevenue from MBNA, and GE Capital and Banco Santander on the basis of the number of cards issued and the revenues generated through the use of the credit cards.

In April 2008, Ryanair entered into a contract with On Air, a provider of mobile voice and data solutions for aircraft, for the provision of an in-flight communications service that will allowallowed Ryanair passengers to use mobile phone and electronic communication devices such as Blackberries^™ while onboard Ryanair aircraft. Ryanair will pay a fee for use of the equipment and bearbore the cost of its installation on Ryanair aircraft. Ryanair will receivereceived commissions on mobile calls made and text messages and emails sent using the service, which will bewere billed to customers based on international roaming rates. On March 29, 2010, On Air notified Ryanair has yetof its intention to receive regulatory approval for this new system but plans to launch a six-month trial ofterminate the contract. Ryanair was pleased with the system starting in late July 2008. Ifperformance and passenger usage and had notified On Air of its wish to roll out the trial is successful,service across the entire fleet. On Air was unwilling to commit to this expense and exercised its right to terminate. Ryanair plans to install this equipmentinvite other providers of similar services to tender for the business.

Ryanair has recently commenced a rollout of handheld Electronic Point of Sale (“EPOS”) devices across its route network. These EPOS devices will replace the existing manual and paper based systems on allboard the aircraft. The EPOS device will enable cabin crew to sell and record their on-board sales transactions more efficiently and generate vastly improved management sales reporting. The device will also be able to issue bus and rail tickets and will replace the existing manual ticket systems. Management expects to complete the rollout of its aircraft. See “Item 5. Operating and Financial Review and Prospects—Resultsthe EPOS devices by the end of Operations—Fiscal Year 2007 Compared with Fiscal Year 2006—Ancillary Revenues” for additional information.August 2010.

MAINTENANCE AND REPAIRS

General

As part of its commitment to safety, Ryanair endeavors to hire qualified maintenance personnel, provide proper training to such personnel, and maintain its aircraft in accordance with European industry standards. While Ryanair seeks to maintain its fleet in a cost-effective manner, management does not seek to extend Ryanair’s low-cost operating strategy to the areas of maintenance, training or quality control.

Ryanair’s quality assurance department deals with oversight of all maintenance activities in accordance with Part 145. The European Aviation Safety Agency (“EASA”), which established Part 145, came into being on September 28, 2003, through the adoption of Regulation (EC) No. 1592/2002 of the European Parliament, and its standards superseded the previous Joint Aviation Authority (“JAA”) requirements. See “—Government Regulation—Regulatory Authorities.”

Ryanair is itself an EASA Part 145-approved maintenance contractor and provides its own routine aircraft maintenance and repair services on its aircraft other than scheduled heavy maintenance.services. Ryanair also performs certain checks on its aircraft, including pre-flight, daily, and transit checks at some of its bases, as well as A-checks at its Dublin, facility.London (Stansted), Glasgow (Prestwick) and Bremen facilities. Since December 2003, Ryanair has operated a two-bay hangar facility at its base at Glasgow (Prestwick) in Scotland, where it carries out both A-checks and C-checks on the fleet of Boeing 737-800 aircraft. The facility is capable of performingperforms two C-checks per week, enabling Ryanair to perform the majoritymost of the heavy maintenance that is currently required on its Boeing 737-800 fleet in-house. Ryanair also expects to complete the construction of a new three-bay maintenance hangar at Glasgow (Prestwick) airport by October 2010, which should accommodate some heavy maintenance work.

Ryanair opened a five-bay hangar and stores facility at its London (Stansted) airport base in October 2008 to allow Ryanair to carry out additional line maintenance on its expanding fleet. This facility also incorporates two flight simulator devices with space and provisions for two more, together with a cabin crew trainer and associated training rooms. Ryanair carries out checks and line maintenance in its single-bay aircraft hangar facility in Bremen. Ryanair has recently entered into a 30-year sole-tenancy agreement with Frankfurt (Hahn) airport to occupy a two-bay hangar and stores facility that also incorporates a two-bay simulator-training center. This facility is undergoing construction. It is expected to be completed by January 2011, allowing Ryanair to carry out additional line maintenance.

Maintenance and repair services that may become necessary while an aircraft is located at onesome of the other airports served by Ryanair are provided by other Part 145-approved contract maintenance providers. Aircraft return each evening to Ryanair’s bases, where they are examined by Ryanair’s approved engineers (or,or, in the case of Brussels (Charleroi), Stockholm (Skvasta), Rome (Ciampino), Frankfurt (Hahn), Milan (Bergamo), Marseille, Barcelona (Girona), Madrid, andAlicante, Dusseldorf (Weeze), Kaunas, Bristol, Brindisi, Bari, Pescara, Trapini, Bologna and Cagliari, by local Part 145-approved companies).companies.

Heavy Maintenance

As noted above, while Ryanair is nowcurrently has sufficient capacity to be able to carry out the majorityall of the routine maintenance work required on its Boeing 737-800 fleet itself,itself. However, Ryanair occasionally contracts with outside maintenance providers for some heavy maintenance services that it cannot accommodate in its own facilities. In particular, Ryanair currently hasenters into short-term, ad hoc contracts with reputable Part 145-approved suppliers of heavy maintenance in the U.K. and Europe, such as ATC Lasham, for the carrying-out of the heavy maintenance overhauls currently required on its relatively new fleet.

Ryanair is also currently negotiating with an Eastern European airporthas entered into a contract to build a new three-bay facilitymaintenance hangar at Glasgow (Prestwick) airport to accommodate the additional maintenance requirements that willit expects to arise asbeginning in winter 2010 due to the airline takes deliveryaging and expansion of the remaining aircraft it has on order.its fleet. This facility is already under construction and is expected to be operationalcompleted by the winter of 2009.October 2010, as is noted above.

Ryanair contracts out engine overhaul service for its Boeing 737-800 aircraft to General Electric Engine Services of Cardiff, Wales, a Part 145-approved contractor, pursuant to a 10-year agreement with an option for a 10-year extension, signed in 2004. This comprehensive maintenance contract provides for the repair and overhaul of the CFM56-7 series engines fitted to the first 155 of Ryanair’s Boeing 737-800 aircraft, the provisionrepair of spare parts and general technical support for the fleet of engines. On June 30, 2008, the Company finalized a contract for a similar level of coverage and support for the engines on all of its aircraft that have been or are scheduled to be delivered as well as any option aircraft delivered pursuant to the Company’s current contracts with Boeing over the period through December 2011.November 2012. General Electric Engine Services mainly uses its Part 145-approved repair facility in Cardiff, Wales for this work, but also uses the KLKM Part 145-approved facility in Amsterdam, and occasionally its Part 145-approved facility in Celma, Brazil. By contracting with experienced Part 145-approved maintenance providers, management believes it is better able to controlensure the quality of its aircraft and engine maintenance. Ryanair assigns a Part 145-certified mechanic to oversee all heavy maintenance and to authorize all engine overhauls performed by third parties. Maintenance providers are also monitored closely by the national authorities under EASA and national regulations.

Ryanair expects to be dependent on third-partyexternal service contracts,contractors, particularly for engine and component maintenance, for the foreseeable future, notwithstanding the additional capabilities provided by its maintenance facilityfacilities at Glasgow (Prestwick), London (Stansted) and Frankfurt (Hahn). See “Item 3. Key Information—Risk Factors—Risks Related to the Company—The Company Is Dependent on Third PartyExternal Service Providers.”

SAFETY RECORD

During its 23-year operating history, Ryanair has not had a single incident involving major injury to a passenger or a member offlight crew fatality in its flight crew.25-year operating history. Ryanair manifestsdemonstrates its commitment to safe operations through its safety training procedures, its investment in safety-related equipment, and its adoption of an internal confidential reporting system for safety issues. The Company’s board of directors also has an air safety committee to review and discuss air safety and related issues. Michael Horgan, a Company director, is the chairman of this committee and reports to the board of directors.