Page last updated at 09:51 GMT, Monday, 3 November 2008

Fuel costs dent Ryanair profits

Ryanair jet landing
Ryanair says its business will recover as oil prices fall

Profits at budget airline Ryanair have fallen 47% in the first half of the financial year, due to a doubling of the price of fuel.

Net profits in the six months to the end of September stood at 214.6m euros (£169m; $277m) compared with 407.6m euros a year earlier, the firm said.

Oil prices have fallen, but Ryanair said it expects to make a loss in the last six months of the financial year.

The Irish airline has also confirmed it is working on a new service to the US.

However, chief executive Michael O'Leary told BBC News Ryanair would only launch transatlantic routes if it could secure cheap long-haul aircraft from rivals.

"We haven't managed that yet, but we are hoping that in the middle of this recession... that that opportunity might arise in the next 12 or 18 months," he said.

'Cost advantage'

The number of passengers using Ryanair grew by 19% to 32 million between April and September.

Despite the economic slowdown, it expects passenger numbers to rise a further 9% this winter, as travellers switch from full-service airlines.

Airlines worldwide have struggled as fuel costs soared earlier this year.

As a result, a number of airlines have gone out of business, and Ryanair predicts more will follow in the coming months.

Oil prices peaked at more than $140 a barrel in July but have since fallen to less than $70.

Mr O'Leary said that if oil prices remained below $80 a barrel then profits would recover.

"We have a significant cost advantage over our competitors, many of whom have hedged fuel next year at significantly higher levels than current market prices," Mr O'Leary said.

"This will force competitors to further increase air fares and widen the price gap between them and Ryanair's lowest fares," he added.

Print Sponsor

Ryanair set for 8 flights to US
02 Nov 08 |  Business
Ryanair seeks probe on fuel cost
16 Oct 08 |  Business
Europeans angry at Ryanair move
13 Aug 08 |  Business
Ryanair blocks 'illegal' bookings
08 Aug 08 |  Business
BAA sues Ryanair over unpaid fees
05 Aug 08 |  Business

The BBC is not responsible for the content of external internet sites

Has China's housing bubble burst?
How the world's oldest clove tree defied an empire
Why Royal Ballet principal Sergei Polunin quit


Sign in

BBC navigation

Copyright © 2020 BBC. The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.

Americas Africa Europe Middle East South Asia Asia Pacific