In a busy day for Ryanair the airline announced its annual and final quarter results, plans to ground planes this winter and a prediction for its 2009 profits. The budget airline said it would ground up to 10% of its fleet this winter to combat higher airport charges, unveiled a 20% rise in adjusted full-year net profit in the year to March 31, which saw a loss in the final quarter, and predicted that it would only break even in 2009.
Ryanair said it would be more profitable to keep 20 aircraft on the ground at Stansted and Dublin this winter than put them in the air. Chief executive Michael O'Leary blamed the 'unjustified' doubling in landing and handling charges at Stansted and higher charges at Dublin Airport.
Ryanair lost 64 million (£50 million) in the fourth quarter ended March 31 - compared to a profit last year of 58.7 million - after writing down its 29.2% stake in Irish competitor Aer Lingus by 91.6 million. Sales rose 21% to 590 million. The quarterly loss was the first since the three months ending March 2004.
Mr O'Leary said that the effect of oil price rises - which have nearly doubled to the $130 dollar a barrel mark over the past year - had been mitigated through bulk buying at cheaper prices. But he warned that this year's prospects depended entirely on oil costs - and that Ryanair would break even if prices remained at the $130 mark for the rest of the year.
The airline said average fares for the coming year were likely to rise by 5%, based on forward bookings. During the year to March 31 the airline's average fares, including baggage charges, were £35 - down 1% on the year before. Total revenues were 21% up to 2.7 billion (£2.1 billion), and excluding exception items - the writedown and other exceptionals such as aircraft sales - profit gained 20% to 480.9 million.
Mr O'Leary said that 'higher oil prices will not mean an end to low-fare air travel. A downturn in the industry provides enormous opportunity for airlines such as Ryanair.' He said he believed the current fuel crisis would lead the way for expansion for Ryanair as it filled the gaps left by other airlines pulling out of routes or going under.
He added: 'The airlines who will survive this period of higher oil prices and industry downturn are those with new cheaper fuel efficient aircraft, lower costs, substantial cash balances, low net debt and management who are ready to exploit downturns to drive costs lower and increase efficiency. No airline is better placed in Europe than Ryanair to trade through this downturn.'
'We will therefore continue to grow, by lowering fares, taking market share from competitors, and expanding in markets where competitors either withdraw capacity or go bust. We believe that our earnings will rebound strongly when oil prices settle down, as we believe they will, and in the interim we will take the tough decisions necessary to lower our costs in this difficult period.' |
