Ryanair Likely To Give Conservative Outlook

May 17, 2007

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Ryanair expects to give "very conservative" guidance when it publishes full-year results next month due to falling ticket prices, Chief Executive Michael O'Leary said on Thursday.

"There's no doubt in our minds that yields are going to be softer," O'Leary said of average ticket prices during a news conference in Milan.

"We therefore think that we will be giving guidance for the next year that for the next 12 months traffic growth will be strong but our yields and profit growth forecasts will be very conservative," he said at the launch of new Italian routes.

O'Leary, whose company's new business year started in April, said Ryanair would likely describe the outlook as "challenging" but also said there should be some good news on costs.

"The market tends to overreact at this bad news," he said. "There's also good news on the costs front. Oil prices are slightly lower, the dollar is significantly weaker."

Jet fuel accounts for a large chunk of costs for airlines while Ryanair's fleet is made up entirely of Boeing aircraft which are priced in dollars.

On Ryanair's long-running bid for Irish rival Aer Lingus, O'Leary repeated he would challenge European Union competition officials in the courts if they blocked the move.

"If somebody came in and offered an enormous amount for our shares, we'd be happy to sell it," he added. Ryanair already has a 25.2 percent stake in Aer Lingus.

O'Leary declined to say what he had proposed to competition authorities in order to secure their backing for the bid but said a Reuters report last week that he had proposed selling Aer Lingus slots in Ireland and Britain could be taken as accurate.