Ryanair says it will break even this year if oil stays near $100 a barrel

RYANAIR SHAREHOLDERS were told yesterday that the airline would break even in the year to the end of March, if oil remains at about $100 (€69.60) a barrel.

The airline had previously guided the market that it could lose up to €60 million this year. At that time, oil was about $140 a barrel.

Ryanair’s share price rose by 3 per cent in Dublin on the news.

In a bid to boost demand, the airline yesterday released five million seats for €5 one way for travel in October and November.

“While the recent fall in oil prices is welcome, it won’t have much impact on our full-year results because we have already hedged Q3 [the third quarter] at $124 a barrel and any Q4 [fourth quarter] fuel savings may be absorbed by lower fares and yields as we stimulate growth in a recession this winter,” chief executive Michael O’Leary told shareholders.

Mr O’Leary said the airline still planned to double passenger numbers to 100 million by 2012, by which time it expected to post annual profits of €800 million.

“Clearly we need a break on oil prices but we’re fairly confident that we will get to break even this year, provided that fares only fall by 5 per cent,” he said.

Mr O’Leary predicted that oil would drop to about $70 a barrel and admitted he had “screwed up” in not hedging the airline’s oil requirement before the price of fuel shot up earlier this year.

One shareholder asked if Ryanair would make a second offer for Aer Lingus. “I’m not certain that today would be the right time to make another offer,” Mr O’Leary said, adding that he did not believe Aer Lingus had a future as an independent airline.

The annual meeting was interrupted by a half-naked environmental protester, Rob Mac, who claimed to be from Co Clare but spoke with an English accent.

He said Ryanair was denying the facts about climate change and lying about the damage the airline industry was doing to the environment.

“We have never denied climate change,” Mr O’Leary responded. “The climate has been changing for the past five billion years.”

Mr O’Leary said he had a herd of cattle, which were responsible for polluting the air. “I’d give up on the planes before I’d give up on the cattle,” he said. “Sure, why don’t we shoot all the cattle? . . . That would solve all our problems.”

The protester was escorted out of the meeting after a few minutes, with Mr O’Leary thanking him for his contribution. “If you could organise a female next year, I’d be extremely grateful,” he said.