Ryanair Flies Into Turbulence
While it has been the darling of the budget airline sector for some time it looks as though Irish giant Ryanair may be about to encounter some turbulence. Such is the pressure from falling traffic numbers, increased fuel prices and rising general costs, it has been reported that the group may see last years profit of Euro481 million wiped out and be forced into an operating loss.
Chief Executive Michael O’Leary has been doing the rounds of late giving investors and sector analysts the downbeat on the sector and the potential for the group. While he believes that many competitors will falter over the coming months, he believes that Ryanair will exit the economic downturn bigger and better.
To this end the group are now looking to cut costs to the bone and increase ticket prices at the same time. While normally this would be a recipe for disaster, there are hopes that consumers will appreciate the situation and the fact that ticket prices are still relatively low. Unfortunately, the longer the price of oil remains above $100 the more pressure this will put on the profitability of the company.
However, it has to be said that many experts see Ryanair in a much stronger position than the vast majority of their competitors.
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