New Ryanair ForumRyanair shares slump on profit warning and load factor specu
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Ryanair shares slump on profit warning and load factor specu
by stuart2468 Sun 27 Jan 2008 - 17:56
Shares in Ryanair fell as much as 7½ percent yesterday on widespread speculation of a profit warning and falling load factors (a measure of the average number of passengers on its flights). Investment bank Morgan Stanley also cut its price target on Europe's biggest low-cost airline yesterday, adding to the market jitters.
From lunchtime yesterday there were widespread rumours that Ryanair is preparing to announce lower estimates for 2008, or even a profit warning for 2009. They suggested that the Irish carrier was struggling to fill its seats in the worsening economic climate. This sent the stock into a spiral, with shares in the airline closing down 4.7 percent at €3.89½ in Dublin, having earlier fallen as low as €3.75.
Ryanair is due to report its third-quarter figures on February 4, and is also expected to update the market on the full-year outlook for 2008 and possibly 2009. The airline's figures and comments will be closely scrutinised given the economic uncertainty in core markets in the UK and Ireland, as well as high oil prices.
A spokesman for Ryanair said the company did not comment on market speculation.
stuart2468- FR Rookie
- Number of posts : 20
Location : Birmingham England
Registration date : 2007-11-14
Q3 results
by atoutprix Tue 5 Feb 2008 - 15:24
Ryanair has announced a Q3 traffic growth of 21%, and a net profit fall of 27% :
http://www.ryanair.com/site/EN/news.php?yr=08&month=feb&story=reg-en-040208
In the newspapers, in the aviation forums, everywhere the motto is : it's the beginning of the end for Ryanair !
A careful perusal of the above announcement fortunately tells quite another story.
As said MOL, it remains a creditable performance in very adverses market conditions. The net profit, even if 27% less than Q3 last year, is still 35 millions euros, which is not bad !
For the whole fiscal year 07/08, there should be a net profit growth of 17,5 % to approximatively 470 million euros.
But what about the next FY, 08/09 ?
Some excerpts :
The outlook is poor, with oil prices at 90 USD a barrel, fear of recession in the UK and many other European countries, and the recent weakness of Sterling, in which a significant proportion of Ryanair's revenues still is.
The European airline sector is presently facing one of its cyclical downturns, with possibility of a "perfect storm" of :
- higher oil price
- poor consumer demand
- weaker sterling
- higher costs at unchecked monopoly airports such as DUB and STN.
There is thus now a significant chance that Ryanair profits may decline next year :
- at most optimistic : a profit growth of only 6% to 500 millions euros.
- at most conservative (ie pessimistic) : a fall of 50% to 235 million euros.
(Nota bene : we still talk of a profit !)
The only competitive response to any consumer uncertainty is for Ryanair to
- slash fares and yields
- stimulate traffic
- encourage price sensitive consumers
- promote new routes/base developments
The airline business is highly cyclical, and we have seen these down turns before. They pose unique long term opportunities for the lower cost producer - Ryanair- to grow rapidly, open new markets, win share from competitors and speed up the pace of industry consolidation. which will lead to loss making competitors disappearing altogether.
Ryanair has the lowest cost base in the European industry and even in a recession will continue to be substantially prifitable.
As I said, one needs to read the whole text, and then one sees that Ryanair seems to be here to stay still for long !
MOL on the subject :
https://www.youtube.com/watch?v=9wGkbzOk3Jc
http://www.ryanair.com/site/EN/news.php?yr=08&month=feb&story=reg-en-040208
In the newspapers, in the aviation forums, everywhere the motto is : it's the beginning of the end for Ryanair !
A careful perusal of the above announcement fortunately tells quite another story.
As said MOL, it remains a creditable performance in very adverses market conditions. The net profit, even if 27% less than Q3 last year, is still 35 millions euros, which is not bad !
For the whole fiscal year 07/08, there should be a net profit growth of 17,5 % to approximatively 470 million euros.
But what about the next FY, 08/09 ?
Some excerpts :
The outlook is poor, with oil prices at 90 USD a barrel, fear of recession in the UK and many other European countries, and the recent weakness of Sterling, in which a significant proportion of Ryanair's revenues still is.
The European airline sector is presently facing one of its cyclical downturns, with possibility of a "perfect storm" of :
- higher oil price
- poor consumer demand
- weaker sterling
- higher costs at unchecked monopoly airports such as DUB and STN.
There is thus now a significant chance that Ryanair profits may decline next year :
- at most optimistic : a profit growth of only 6% to 500 millions euros.
- at most conservative (ie pessimistic) : a fall of 50% to 235 million euros.
(Nota bene : we still talk of a profit !)
The only competitive response to any consumer uncertainty is for Ryanair to
- slash fares and yields
- stimulate traffic
- encourage price sensitive consumers
- promote new routes/base developments
The airline business is highly cyclical, and we have seen these down turns before. They pose unique long term opportunities for the lower cost producer - Ryanair- to grow rapidly, open new markets, win share from competitors and speed up the pace of industry consolidation. which will lead to loss making competitors disappearing altogether.
Ryanair has the lowest cost base in the European industry and even in a recession will continue to be substantially prifitable.
As I said, one needs to read the whole text, and then one sees that Ryanair seems to be here to stay still for long !
MOL on the subject :
https://www.youtube.com/watch?v=9wGkbzOk3Jc
atoutprix- FR Moderator
- Number of posts : 2351
Location : Brussels, Belgium (nearest FR base : BRU)
Registration date : 2007-12-13
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