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Ryanair upbeat as profits fall Ryanair upbeat as profits fall
(about 1 hour later)
Profits at budget airline Ryanair have fallen 47% but the airline believes that earnings will bounce back as oil prices fall. Profits at budget airline Ryanair have fallen 47% in the first half of the financial year, due to a doubling of the price of fuel.
Net profit in the six months to the end of September stood at 214.6m euros (£169m; $277m) compared with 407.6m euros a year earlier, the firm said. Net profits in the six months to the end of September stood at 214.6m euros (£169m; $277m) compared with 407.6m euros a year earlier, the firm said.
Chief executive Michael O'Leary said that if oil prices remain at $80 a barrel then profits would recover. Oil prices have fallen, but Ryanair said it expects to make a loss in the last six months of the financial year.
The Irish airline is reported to be planning low-cost flights to the US.
The number of passengers using Ryanair grew by 19% to 32 million between April and September.
Despite the economic slowdown, it expects passenger numbers to rise a further 9% this winter, as travellers switch from full-service airlines.
'Cost advantage'
Airlines worldwide have struggled as fuel costs soared earlier this year.Airlines worldwide have struggled as fuel costs soared earlier this year.
Oil prices peaked at more than $140 a barrel in July this year but have since fallen to less than $70. As a result, a number of airlines have gone out of business, and Ryanair predicts more will follow in the coming months.
"We have a significant cost advantage over our competitors many of whom have hedged fuel next year at significantly higher levels than current market prices," Mr O'Leary said. Oil prices peaked at more than $140 a barrel in July but have since fallen to less than $70.
"This will force competitors to further increase airfares and widen the price gap between them and Ryanair's lowest fares," he added. Chief executive Michael O'Leary said that if oil prices remained below $80 a barrel then profits would recover.
The airline has also said it plans to begin offering flights to the US for £8, by buying planes from struggling rivals. "We have a significant cost advantage over our competitors, many of whom have hedged fuel next year at significantly higher levels than current market prices," Mr O'Leary said.
"This will force competitors to further increase air fares and widen the price gap between them and Ryanair's lowest fares," he added.