Ryanair eyes 36 new jets to bring fleet on par with BA

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RYANAIR plans to exercise options to buy an additional 36 aircraft from Boeing in a move that will boost its planned fleet to roughly 302 planes. The list price of the aircraft order will be in the region of $2.6bn (€2.05bn).

Deputy chief executive Michael Cawley said the low-cost carrier was "very likely" to confirm the orders as the airline yesterday reported a 28pc fall in pre-exceptional second-quarter profit to the end of September, to €193.6m.

Ryanair currently has a fleet of 160 aircraft and has already placed firm orders to increase that number to 279 by 2013. The latest planned orders will place its fleet size on par with BA.

Mr Cawley told reporters in Dublin that Ryanair plans to be carrying 90 million passengers a year by 2012 compared to the 58 million that will use the carrier this financial year. He added that Ryanair should return to "considerable profitability" next year.

The slump in Ryanair's quarterly profits came as the airline faced a 109pc jump in fuel prices, which totalled €422m in the period. For the six months to the end of September, Ryanair generated a pre-exceptional profit of €214.6m, a 47pc decline from €407.6m for the same period in 2007.

Second-quarter revenue rose more than 20pc to €1.03bn, while ancillary revenues (income from items such as car rental and hotel bookings) climbed 30pc to €175.4m. Six-monthly revenue topped €1.8bn, up more than 16pc.

The carrier wrote down the value of its investment in Aer Lingus by €93.6m, while it also incurred additional costs due to the accelerated depreciation of 15 aircraft to be sold in the current and subsequent financial year.

Ryanair has also spent €46m in the past six months buying back its own shares at an average price of €2. Mr Cawley could not say whether further writedowns on its 29.8pc stake in Aer Lingus would be necessary in coming months.

The company has also hedged 25pc of its fuel costs for the first and second quarters of its next fiscal year at an average price of $77 a barrel.

The hedging was done with "considerable difficulty" according to Mr Cawley, who added that the carrier would have hedged more of its fuel costs for next year had it been able to. He said current market conditions had exacerbated problems in doing so.

Neil Glynn of NCB Stockbrokers said that Ryanair still expected to break even this financial year even though oil prices had dropped further to around $66 per barrel.

NCB had forecast that Ryanair would break even with oil as high as $110 per barrel.

He said Ryanair's break-even projection, based on current, lower oil prices, was a "particularly negative statement".

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