Never a Better Time to Lower Fares: Ryanair CEO
While legacy airlines are facing questions over viability they are missing the perfect time to change their model and lower fares, Ryanair CEO Michael O'Leary told CNBC Tuesday.
Ryanair posted a 78 percent fall in full-year adjusted earnings to 105 million euros ($149 million), and said on Tuesday it planned to at least double that in 2009/10, contrasting the bleak outlook of rivals.
With low fuel prices, low interest rates, a weaker dollar and cheaper aircraft, there's "never been a better time to lower fares," O'Leary told "Squawk Box Europe."
By contrast, national carriers like British Airways and Lufthansa are trying to raise fares and are still "desperately hanging on to a fuel surcharge" with oil at $60 a barrel.
British Airways' chief executive wrote in the company newspaper that the airlin is facing a "fight for survival."
Ryanair is expected to take delivery of 150 aircraft through 2012 and wants order another 200 to 300 aircraft, O'Leary said.
The plan is to grow to 100 million passengers by 2012 and 150 million after that by "taking them off British Airways," he added.
As for fuel prices, the company was totally unhedged in 2008 and 90 percent hedged at $62 a barrel throughout the rest of 2009, O'Leary said.
- Watch the full interview with Michael O'Leary above.
Profit Tops Estimates, Excluding Writedowns
Adjusted net profit for Europe's biggest low-cost carrier for the year to he end of March was above the 35.7 million euros average forecast in a poll of 13 analysts by Reuters Estimates.
However, after writing down 222.5 million euros for the fall in the value of ts stake in Irish rival Aer Lingus and 51.6 million for accelerated depreciation on aircraft disposals, Ryanair made a loss of 169 million euros.
Ryanair said it expected to grow after-tax profit in this fiscal year to a range between 200 million and 300 million euros.
Ryanair increased its passenger numbers by 15 percent in 2008/09 to 58.5 million and plans to grow that further to 67 million this year by cutting average fares by between 15 to 20 percent, it said.
In contrast to its former Irish takeover target Aer Lingus which has repeatedly warned in recent months of risks to its long-term viability, Ryanair said its 2.3 billion euro cash pile was still rising.
-- Reuters contributed to this report
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