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Profits up but shares in Ryanair go down

IRISH no-frills airline Ryanair Holdings Plc reported surging first-quarter profits yesterday, citing sharply lower fuel costs and a business model that thrives during recession. The company slashed its profit outlook, however, causing shares to slump.

The carrier said net profit for the three months to June 30 was 136.5 million euros (US$194.5 million) compared to 21 million euros in the same quarter of 2008.

Sales were virtually flat at 774.7 million euros versus 776.9 million euros a year ago. But fuel costs fell 41.6 percent to 214.1 million euros.

Deputy Chief Executive Michael Cawley said Ryanair would discount average fares "precipitously" in coming months to keep its aircraft as full as possible. This would allow Ryanair to maximize the revenue it gets from car and hotel bookings, luggage charges, credit card fees and on-board sales.

Cawley narrowed Ryanair's forecast of full-year net profit to a range between 200 million euros and 250 million euros. Ryanair previously said net profits could reach 300 million euros.

Ryanair shares fell 10 percent to 3 euros in early trading on the Irish Stock Exchange.


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