Ryanair falls to first ever annual loss

BUDGET airline Ryanair reported its first ever annual loss yesterday, blaming high fuel costs and massive writedowns on the value of its stake in Irish rival Aer Lingus.

The no-frills airline said its losses for the year to 31 March 2009 were €180.4m (£155m), down from a profit of €481m the previous year.

The company said it had been forced to write down the value of its 29.8 per cent stake in Aer Lingus by a further €222m, after the Irish flag-carrier’s share price plummeted.

And chief executive Michael O’Leary warned that next winter could be “terrible” for airlines.

“There will be a black cloud over the industry,” he added.

But passenger numbers at the airline went up by 15 per cent during the year, helping push group revenues up by eight per cent to €2.94m.

Ryanair said it plans to increase its passenger numbers to 67m by the end of the year by slashing its average one-way fare to as little as €32, a reduction of up to 25 per cent.

O’Leary said that, just as McDonald’s and Ikea were booming in by offering lower prices, Ryanair would continue to mop up new customers by maintaining low fares.

“We will continue to lower fares to stimulate traffic growth, maintain high load factors and win more short-haul traffic from our high-fare competitors,” he added.

O’Leary said that the firm was unlikely to make another bid for Aer Lingus, after its two previous takeover attempts failed.

Ryanair is the latest airline to announce losses as the industry struggles through the recession.

RYANAIR’S TURBULENT HISTORY
February 08
Michael O’Leary says he has factored for a European recession lasting up to 18 months into its business plan.

March 2008
Ryanair says it will freeze the pay of top executives to counteract high fuel costs.

January 2009
Ryanair has its €750m bid for Aer Lingus rejected by investors and the Irish government on competition grounds.

February 2009
Posts €101.5m third-quarter net loss but raises its full-year outlook to profit due to lower fuel costs.

June 2009
Posts its first full-year loss in two decades after writing down €222.5m on its investment in Aer Lingus.