Tuesday June 2, 03:43 PM
Ryanair swings into annual net loss
DUBLIN (AFP) - Irish low-cost airline Ryanair (Dublin: RY4.IR - news) on Tuesday reported an annual net loss of 169 million euros (239 million dollars) blamed on high fuel costs and a large writedown on its stake in Aer Lingus (LSE: AERL.L - news) .
The loss, suffered in the 12 months to the end of March, compared with net profit of 390.71 million euros in the group's previous financial year.
The airline said in a statement that fuel costs surged 59 percent to 1.257 billion euros in 2008-2009 because of higher oil prices. Jet fuel, or kerosene, is refined from crude oil.
World oil prices had struck record high points above 147 dollars a barrel in July 2008 but have since slumped as the global economic downturn slashes energy demand.
Ryanair meanwhile made a 225-million-euro writedown on the value of its 29.8-percent stake in Aer Lingus owing to a sharp drop in its Irish rival's share price.
Ryanair predicted it would bounce back into the black in the current financial year with net profits of between 200-300 million euros thanks to lower fuel costs.
Passenger numbers jumped by 15 percent last year to 58.5 million people and group revenue increased 8.5 percent to 2.94 billion euros, as travellers looked for cheaper flights amid a deep recession in Britain, Ireland and the eurozone.
Chief Executive Michael O'Leary said that Ryanair would offer value for money to beat the recession, emulating discount supermarkets Aldi and Lidl, Swedish home furnishings giant Ikea and fast-food chain McDonalds.
"In this recessionary environment, we intend to continue to offer European consumers more competition, more choice and even better value," he said.
The group added that it made an underlying annual net profit, stripping out the Aer Lingus writedown and other exceptional costs, of 105 million euros.
Ryanair withdrew a one-billion-dollar (748-million-euro) takeover offer for Aer Lingus in January, but still owns almost one third of the rival Irish airline.
"The recession and declining consumer confidence is proving to be good for Ryanair's growth, as millions of passengers switch to our lower fares," O'Leary said.
"All of our major competitors have reported material reductions in short-haul capacity and traffic.
"Ryanair will continue to lower fares to stimulate traffic growth, maintain high load factors and win more short-haul traffic from our high fare competitors," added the chief executive.
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