RYANAIR TO GROUND 10% OF FLEET AS AIRPORT CHARGES RISE - Ryanair said it made €480m in profits for the 12 months to the end of March. But the airline is warning that this time next year that figure will be wiped out if the price of oil remains at $130 a barrel. The airline has described the current price of oil as 'irrational'.
Ryanair's deputy chief executive and finance director Howard Millar says that the entire airline industry is facing a tsunami in terms of much higher fuel prices. He says this will mean that losses will rise 'very significantly' for the industry as the fuel price of €130 barrel bites. He says the industry will see reduced capacity with less flights operating and he predicts that more airlines will go bust. For Ryanair, he says the airline's net profits will fall. But he adds that it still has the highest net margin in the industry and so has the biggest headroom.
Mr Millar says that to stave off losses, Ryanair is going to focus on reducing costs. He says that the airline will also probably ground about 10% of its fleet -or about 20 planes - this winter. He says that both Dublin and Stansted have become very expensive airports to operate out of, with prices doubling at both in recent months. He warns that routes which underperform because of high airport charges will be taken out of operation.
MORNING BRIEFS - The price of oil fell in overnight trade. New York crude dropped 46 cent a barrel on last night's close to $127.30 while Brent oil dropped 71 cents to $127.31.
*** Irish banking shares will be closely watched today after values were dented in London yesterday in the fall-out from a string of very negative news emanating from UK buy to let mortgage lender Bradford and Bingley.. Bank of Ireland and Anglo Irish Bank saw their share value fall 7% yesterday in London. Irish Life & Permanent was down 4.5%.
*** There was a further sign of things being tough out there with the latest news from a debt collection company called Interim Justica. It finds that Irish businesses are being paid later and later - with the average delay in paying after the agreed payment date - now at 16 and a half days, compared to 14 days a year ago.
*** On the currency markets, the euro is worth $1.5568 and 79.31 pence sterling.
