Ryanair expects net profit to halve

Ryanair Chief Executive Michael O'Leary expects profits to halve in the coming year, fulfilling the most pessimistic of a number of possible scenarios given by the airline in February.

"Our guidance remains the same from our last," Mr O'Leary told reporters at a news conference in Brussels today. "We will update this in June at our results but I expect a 50 per cent drop in profits in the next 12 months."
The Irish budget airline warned in February high oil prices, a faltering UK economy and weak sterling meant net profit could halve in its business year starting in April but that was the bleakest of a range of forecasts that saw a 6 per cent profit rise at best.

O'Leary said the airline's plans to continue growing the number passengers it carries would be offset by "a significant reduction in airfares" over the next 12 months.

"Our senior management of around 36, including myself, will take a pay freeze until we see a turnaround in our profits," Mr O'Leary said.

Mr O'Leary also said he expected Ryanair, Europe's biggest low-cost carrier, to remain largely unhedged for the rest of 2008 once its current insurance against high fuel prices expires at the end of this month.

"I reckon we will take our chances on current price of oil for the rest of the year," O'Leary told reporters at a news conference in Brussels.

"If it drops below €80 we would then jump to hedge," he added.