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Loss but Ryanair eyes profit for year

Source: Agencies | February 3, 2009, Tuesday | Print Edition

IRISH airline Ryanair yesterday posted a third-quarter net loss but raised its full-year outlook to a profit from breakeven, due to lower fuel costs, and forecast substantial profit next year.

Europe's largest low-cost carrier posted a 101.5-million-euro (US$130.4 million) adjusted net loss for the three months to the end of December, compared with a 35 -million-euro profit a year ago and a forecast for a 106.8-million-euro loss according to the average of two analysts on Reuters Estimates.

It now expects a smaller fourth-quarter loss than previously anticipated due to lower fuel costs, allowing it to raise full-year guidance to net profit in the 50 million euro to 80 million euro range versus an earlier projection of breakeven, it said.

"The 38 percent reduction in oil prices which our fuel hedging has secured will ensure that Ryanair returns to substantial profitability next year, when many of our competitors will be reporting losses," Ryanair said.

Ryanair expects fares to fall by over 10 percent next year, or more if the recession deepens, it said, adding that it does not expect to give precise earnings guidance for 2009-10 until the fare outlook becomes clearer.

"The longer and deeper this recession, the better it will be for the lowest cost producers in every sector," Chief Executive Michael O'Leary said.

"Like Lidl, Aldi, Ikea and McDonalds, Ryanair is the lowest cost provider in the European airline industry, and we are poised for substantial traffic and profit growth in the coming year as the recession forces millions of passengers to focus on price," he said.


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