Ryanair Shares Nose Dive
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Monday February 04, 2008 12:40
by Michelle Crawley
Ryanair Profits Plummett amid market fears
Ryanair Shares Nose Dive
Ryanair took a 12% slump in this morning’s trade, further intensifying fears of poor market conditions amid recessionary fears. Today Ryanair announced a 27% drop in pre tax profits in its third quarter net profits. Further falls are predicted for the company in its next fiscal year.
'With oil prices at $90 a barrel and fear of recession in the UK and many other European economies, the current outlook for the coming fiscal year is poor. While it is impossible to accurately forecast full year fuel prices and yields this far in advance, there is now a significant chance that profits may decline next year,' Mr. O'Leary cautioned.
However Ryanair are not the only airline to suffer from the economic downturn, Aer Lingus shares are down 3 cent to €2.30. However shrewd, Mr. O’Leary has plans to spend up to 200 million purchasing back shares in the company, which equates to 3% of the company share capital. The shares may have plummeted, however like any of their bowing 747’s, their reliability and stability should see them soar through the present economic storm.
By Michelle Crawley.
Comments (1 of 1)
Jump To Comment: 1It looks like the price of fuel is affecting Ryanair after all. However back in Aug 2006, Ryanair made a great big fuss about other airlines charging fuel charges and they weren't. In hindsight this now seems to be because they likely hedged fuel purchases correctly but never realised they would stay high and even go higher in the years since.
This is what Ryanair had to say in Aug 2006 and it was reported widely at the time.
O'Leary also again said that Ryanair would never impose fuel surcharges, even if the cost of oil exceeded $200 (€160) a barrel.
"Ryanair will never introduce fuel surcharges, today tomorrow or ever, even if it reaches $200 a barrel," O'Leary said. "Admittedly, if it hits $200 a barrel we'll be the only airline left flying in Europe."
Ref: http://www.finfacts.com/irelandbusinessnews/publish/art...shtml
It looks like they could be soon eating their words.
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