Ryanair Hedges Fuel Needs To March 2007
Ryanair said on Tuesday it had hedged its fuel requirements for the period from January to March 2007 at a rate equivalent to USD$73 per barrel of Brent crude.
Europe's biggest no-frills carrier had previously hedged most of its requirements to the end of 2006 at USD$74 a barrel and said earlier this month it would consider hedging the first quarter of 2007 at anything below that price.
Oil prices steadied on Tuesday after briefly dipping to a six-month low under USD$60 in the previous session.
US crude, which has fallen nearly USD$19 from its mid-July peak -- the steepest slide in more than 15 years -- settled up 90 cents at USD$61.45 a barrel.
John Sheehan at NCB Stockbrokers in Dublin said the airline's unhedged position beyond March 2007 left it well-placed to benefit from a continued decline in fuel costs.
He noted Ryanair's passenger traffic was up 24 percent in the first five months of the year and that the 18 percent growth required over the remainder of 2006/07 to hit its targeted 42 million passengers for the year was achievable.
"Such continued strong passenger growth coupled with a more stable fuel price environment would see earnings growth accelerate to circa 20 percent in the year to March 2008," he said in a note to investors.