Taylor on Travel

Ryanair figures generally repay scrutiny - allowing one to spot when a headline "40% reduction in winter capacity at Stansted" is really a 14% reduction, for example.

So the carrier's first-quarter profits, reported yesterday, are of interest. Ryanair's description of a "robust performance in a deep recession" is reasonable. Thecarrier turned in a profit of Euros136.5 million for the three months to June, excluding "exceptional items" and "after tax". The latter strikes me as odd for a first-quarter result, but leave that aside. It was six-and-a -half times the profit the year before.

Passenger numbers rose 11% to 16.6 million, but that is not where the increased profit came from. It came almost entirely from the fall in the price Ryanair paid for fuel. That bill fell 42%, or by Euros152 million.

Add in the 13% increase in "ancillary revenues" to Euros165 million and things don't look quite so robust. Whether ancillary revenue continues to rise at such rate as passengers cotton on to the penalties for failing to check-in online or taking a bag on holiday need not concern us here.

Ryanair had 11% more bums on seats year on year, but it recorded a 3% fall in revenue from fares. The more you carry, the less you make is unlikely to prove a sustainable long-term model. Allied to a warning of still lower fares and annual profits at the bottom range of a previous forecast, this was enough to produce a 9% fall in Ryanair's share price yesterday.

The Financial Times points out the carrier's shares "still trade on almost 20 times the forecast earnings" - suggesting the only way is down.

It is hard not to smile at the Ofcom report on broadband speeds that concludes customers on average receive a service half the rate they believe they signed up for. I'm surprised to hear it is as high as that.

The trick is that internet service providers are allowed to quote their maximum speeds, not the download rate you can expect if you do not live next to the exchange.

Instead of the up-to-8Mb per second usually quoted, most users are getting about 4Mb and one in five receive under 2Mb. So the average movie of 90 minutes takes considerably longer to download than to watch - between two and three hours, in fact. Download at peak time, between 8pm and 10pm, and it will take longer.

That puts many of the wilder claims about the web in context and should be a caution to those, including in the travel industry, who seem to believe our every experience will soon be online. It won't.

Anyone who missed David Blanchflower's comment in The Guardian of July 15, headlined "And next, the semi-slump", should do themselves a favour and catch up online.

Blanchflower was a member of the Bank of England's monetary policy committee until May, and probably the most critical of official policy.

He quotes John Maynard Keynes warning in 1930 that, "The duration of the slump may be much more prolonged than most people are expecting", and goes on to explain why that might apply today.

I recommend saving the article for re-reading each day the FTSE rises.

The latest snapshot of high-street retail activity, the CBI's Distributive Trades Survey, shows sales in July down for a third consecutive month - though the latest fall was not as severe as previously.

One in three retailers reported "poor" sales for the time of year - double the rate in June.

The oil price fell around $4 yesterday, settling somewhere between $63 and $66.5 a barrel. It was spluttering around the same at the time of writing after hitting $70 early in the week.

What does this tell us? The price has largely reflected the movements of the major stock markets. The rally in the FTSE 100 for a record-equalling 11 consecutive days, up to Tuesday, encouraged a belief that economic recovery is around the corner - flying in the face of figures showing a deeper than expected recession in the UK. Oil rose alongside.

That suggests a real recovery - and not just hope of one - may trigger at least as much and probably something more.

The real point is that $63-$70 is an unusually high price for oil outside of last year's price spiral and in the deepest global recession for decades. In fact, it is extraordinary - and sets the baseline from which the price will surely increase with any pick-up in global GDP.

If that happens alongside the kind of marginal recovery optimists predict for the UK - perhaps 0.5% growth next year, which amounts to stagnation - and no real change in the value of sterling, it spells more pain for the travel industry.