Ryanair confident of achieving earnings target

Ryanair believes it will be able to ride out the shock wave caused by the terrorist attack on New York and Washington.

"Whilst we remain cautious about the trading environment, we see no reason -- at this time -- to change the consensus range of analyst estimates for either the current quarter, or this fiscal year," said Mr Michael O'Leary, the Ryanair chief executive yesterday. Davy Stockbrokers expect Ryanair to make a profit of €144 million this year while Goodbody Stockbrokers were predicting €143 million, before the events of last week.

Ryanair become the second most valuable airline in Europe yesterday as its rivals' stock market capitalisations shrank in the face of concerted selling by worried investors. Ryanair's market value was just over €3 billion when the market closed last night, marginally ahead of Monday's closing valuation of the world's largest airline company, American Airlines, which fell 39 per cent on Monday to a mere $2.7 billion (€2.97 billion).

The company said the immediate impact on it of last week's events were limited and that it had cancelled only 16 out of 1,800 flights over the past seven days.

In the two days immediately after last Tuesday's attacks, bookings fell by about 20 percent, but bookings for the week were down only 10 percent and had now returned to normal, said Mr O'Leary. "Advance bookings and loads remain strong and therefore the immediate consequences of last week's events on Ryanair will not be material," predicted Mr O'Leary.

Ryanair's lack of exposure to the transatlantic market has so far protected it from the sell-off that ravaged its peers. The most valuable European airline on Tuesday was Lufthansa. But, at €4.18 billion, its worth is a little less than that of Heidelberger Druckmaschinen, a profitable German manufacturer of printing presses which gets less investor attention.

The market capitalisation of British Airways, which is financed largely by debt, rather than equity, was just €2.97 billion on Tuesday. Such national icons as Air France (valued at €2.2 billion), Alitalia (€1.1 billion) and KLM Royal Dutch Airlines (€423 million) were worth even less. The fall in equity value over the past week was more than 40 percent in the case of Swissair Group, which is now worth just €419 million.

Ryanair pointed out yesterday that it had one of the strongest balance sheets in the sector with €700 million in cash, and "is well placed to weather any economic or traffic downturn". It said insurance costs were certain to rise but added its fuel supply was fully hedged for the next 12 months.

"Obviously any of these predictions will be subject to the impact and outcome of any military response by the U.S. and its allies, but in the interim, Ryanair remains cautiously optimistic that current trading and our immediate future prospects will not be affected to any material extent, and we see no reason why current consensus estimates should be altered," Mr O'Leary said.