RYANAIR WRITES DOWN VALUE OF AER LINGUS HOLDING BY €222M - On a day when tragedy over the South Atlantic overshadows the airline industry Ryanair this morning published its annual results. The company reported its first annual loss, owing to the higher cost of fuel last year and the massive fall in value of its 29.8% shareholding in Aer Lingus. This time last year it reported a profit of €481m. This year its net loss came to €169m - a bigger loss than analysts had expected. Passenger numbers were up by 15% to almost 60m and sales grew by 8.4% to €2.94 billion.
Ryanair's deputy chief executive Howard Millar says that when the €222m writedown on its Aer Lingus stake and aircraft depreciation costs are taken into account, the airline was the only one in Europe to record a trading profit of €105m. He says that Ryanair is looking to more than double that trading profit next year to between €200-300m.
Ryanair has tabled two resolutions on executive pay for the Aer Lingus AGM later this week. Mr Millar says that Ryanair wants to see costs reduced at Aer Lingus, while it also wants to see the business grow and create new jobs. He says he wants Transport Minister Noel Dempsey to start this process by cutting back on the 'fat cat' pay packages currently being paid at Aer Lingus. He says that the AGM is a great opportunity for the Minister to kick-start this process.
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MORNING BRIEFS - General Motors filed for bankruptcy protection early yesterday. This comes after years of losses and a dramatic drop in sales in recent months. The move will lead to job cuts and big changes, but President Obama and the company's CEO Fritz Henderson both promise that a more viable GM will emerge from bankruptcy. Already the firm had got $19.4 billion in federal help, but that was not enough to keep the US's biggest carmaker out of bankruptcy, and the US government is going to pour another 30 billion dollars into GM to fund operations during its reorganisation, bringing its shareholding up to about 60%. It will also see GM begin to make a bigger share of its cars in the US again.
US Chapter 11 bankruptcy protection gives US firms time to restructure their finances while being protected from creditors.
*** GM's main European business, Opel, and its UK brand Vauxhall, will not be affected by the bankruptcy protection move. This is because their ownership has been transferred to a trust fund ahead of their sale, GM Europe confirmed in a statement. Canadian car parts maker Magna International last week agreed to buy Opel and Vauxhall.
*** Small firms group ISME says 70,000 jobs are under threat as more than a third of its members are planning to cut jobs, according to its latest employment survey. It says 91% of those surveyed had either cut jobs or frozen pay since the beginning of the year.
*** On the currency markets the euro is trading at $1.4157 cents after hitting a six month high overnight. The dollar has fallen on signs the global economy is improving. This makes currency traders move to higher-yielding currencies. Against sterling the euro is 86.09 pence this morning.
