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Ryanair has sights set on greater market share

July 27, 2009

EUROPE RYANAIRRyanair’s warning that things are going to get worse in Europe’s economies has understandably got investors in airline shares flustered. The airline’s own shares fell by more than 8 percent.

The low-cost airline’s finance director Howard Miller couldn’t have been more stark in his comments: “There are no signs of recovery in any country across Europe. We think things are getting worse. There are no signs of green shoots so a tough winter for everyone”.

At least Ryanair still reckons it will be profitable — with net profit of around 200 million euros — for the year as a whole.

That’s more than can be said of most other European airlines, who must be increasingly concerned by Ryanair’s resilience. Ryanair points out that it has “only” 10 percent of the total European market so far — giving it plenty of scope for gains.

Ryanair’s earnings have been helped by lower fuel costs, and chief executive Michael O’Leary should be heartened by a Reuters poll of oil supply and demand forecasts for 2010 which shows the oil market is set to remain well supplied until then.

And with plans to increase its fleet to 300 from 200 by 2012, it looks as though you’ll be seeing more not fewer of the airline’s planes — with their distinctive gold harp logo — flying overhead.

Comments

You also have to mention that Ryanair’s chief financial officer Howard Millar said that the increase was mainly due to cheaper aviation fuel, which costs 40% less than a year ago. Thanks to this decrease the budget compagny saved 432M€.profitability is going to fall considerably as the group expects a rise of 15% of the traffic this year while the average costs of the tickets should fall of 20% even more. Profitability is clearly the main strength of Ryanair and the very important news is that the profitability of this airline is decreasing. We can also mention that it will be hard for the Irish company to reach its goal of 15% passenger increase if O’Leary really decides to cut 40% of its flight this winter in UK Stansted airport, Dublin and Prestwick. I mean it’s seem hard to believe…

 

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