Ryanair said yesterday that, despite soaring oil prices, it is sticking to expectations that it can deliver earnings growth of 10 per cent this year.
The low-cost airline, which announced four new routes out of London's Stansted airport yesterday, conceded that its fuel bill would be higher than expected if oil prices stay at their current record highs near $60 (€49.28) a barrel.
But Ryanair chief executive Michael O'Leary said the company's guidance, which is for net income of €295 million, was unchanged. He also noted that while Ryanair's fuel costs would be higher, the impact on its competitors would be greater still. He predicted that rising fuel costs would lead to further hikes in fuel surcharges by full-service airlines, sending more passengers to the low-cost sector.
"The bloodbath in Europe, it is continuing and will get worse at $60 a barrel," he said yesterday. "It is not pretty out there. If oil stays at $60 per barrel over the next 12 months, most of Europe's airlines will show enormous losses."
Mr O'Leary was speaking at the announcement of four new routes from Stansted airport. From the autumn, the airline will begin flying to Grenoble in France, to Kaunas in Lithuania and to Poznan and Lodz in Poland. The airline has also increased the frequency of its services from Stansted to Derry, Seville, Granada, Riga and Tampere. The new routes and additional frequencies should result in an additional 650,000 passengers per annum, Ryanair said.
The airline, which set up its first route to Poland just three months ago, will now service seven Polish airports directly from London.
NCB noted that Ryanair was taping the lucrative migrant worker flows between the EU accession countries and the core EU states.
"This is a market that the group has a strong history in as the business was originally built on worker flows between Ireland and the UK," said NCB analyst Shane Matthews.
Mr O'Leary added that Ryanair would not be joining the sustainable aviation group set up this week by British Airways, Virgin Atlantic and easyJet, aimed at cracking down on pollution, noise and harmful emissions.
Shares in Ryanair closed three cent lower at €6.30 last night.
