Page last updated at 06:27 GMT, Tuesday, 2 June 2009 07:27 UK

Ryanair reports first annual loss

Michael O'Leary on Ryanair's losses

Ryanair has reported its first annual loss after it was hit by higher fuel costs and had to write down the value of its stake in rival Aer Lingus.

The Irish airline made a net loss of 169m euros ($239m; £146m) in the year to 31 March. This compares with a profit of 481m euros a year before.

Annual sales at the budget carrier increased 8.4% to 2.94bn euros.

The firm said its fuel costs rose to 1.26bn euros from 791.3m a year before, as oil prices hit records last summer.

Ryanair's loss was larger than analysts had expected.

Fare cuts

The company said it had been forced to write down the value of its 29.8% stake in Aer Lingus by a further 222m euros, after Aer Lingus' share price fell.

We're this year going to carry twice the total number of passengers as British Airways, business class is now officially dead
Michael O'Leary, Ryanair chief executive

Stripping out the impact of the Aer Lingus write down, and other one-off factors, Ryanair made a profit of 105m euros, a 78% fall on a year earlier.

Ryanair has had two takeover approaches for Aer Lingus rejected since 2006, the last being turned down in January by the Irish government, which is Aer Lingus' second-largest shareholder.

Ryanair said it was now benefiting from lower fuel prices.

"We intend to use reductions in both fuel and other costs to drive fares materially lower," said Ryanair chief executive Michael O'Leary.

I can see a time when flying becomes even more expensive due to fuel prices and tax increases. Yes, they do have a future, but what is cheap today may be more expensive tomorrow
Worry Wort, Sheffield

Global oil prices hit a record high of $147 a barrel last July before falling to a low of $32.40 in December as the global recession deepened.

Oil prices currently stand at about $67 a barrel.

Mr O'Leary said the carrier expected to report profits of between 200m and 300m euros for its current financial year, as its continues to attract more passenger through cutting ticket prices.

"I think the reason we're growing so strongly is you know we're this year going to carry twice the total number of passengers as British Airways, business class is now officially dead," he told the BBC.

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