| 3.6°C Dublin

Ryanair prepares to ground flights as fuel prices take off

RYANAIR today warned that it will be forced to cut flights amid high fuel costs.

Despite the planned move, the no-frills airline increased its 2011 profit forecast by 10pc, saying higher revenues per passenger mile would offset stubbornly high fuel prices.

The company said it had seen virtually no impact from the downturn in consumer confidence, but warned traffic would fall in the coming months as it grounded aircraft as a result of high fuel prices.

A Ryanair spokesperson said that in November, the company expected a traffic decline of 10pc or almost 500,000 passengers as it grounded up to 80 aircraft due to higher oil prices.

The airline, which flew more than 70 million passengers last year, said it expected to make a profit before tax of €440m for its 2011 financial year, up from its previous forecast of €400m.

"We are well booked for the coming months, fractionally ahead of where we were last year," said Chief Financial Officer Howard Millar.

"So far we have not seen any impact from recession."

The airline earned €452m in the six months to September, up 20pc from a year earlier, on revenues of €2.18bn. Net profit before tax for the three months to September was €404m.

Ryanair closed on Friday at €3.65 per share, down 8pc since the beginning of the year, compared with a fall of 23pc at rival low-cost carrier EasyJet.

Speaking this morning, Ryanair boss Michael O'Leary explained that despite the economic downturn, people still needed flights across Europe.

He pointed to immigrants in cities such as London who would want to return home to their native cities throughout the year.

The good news for the low-cost airline comes a week after the company launched its charity calender in a blaze of publicity.

In one of his more memorable photocalls, O'Leary gamely stripped down to a pair of garish swimming togs and donned a pair of flippers and a snorkel while posing with the crew members at the launch of the 2012 calendar.

This year all proceeds are going to Irish charity DEBRA.

It helps people suffering from a condition called Epidermolysis Bullosa, which makes their skin fragile. The charity was chosen from more than 400 applicants.

hnews@herald.ie


Privacy