Decrease in oil prices boosts Air France and Ryanair

Air France, Lufthansa and Ryanair have all been given a boost by falling oil prices, according to a Bloomberg report. Ryanair did especially well in terms of market gains-the carrier’s shares closed 24 cents up compared to the previous day of trading, representing a 7.6 percent increase. As such, each Ryanair share is now valued at 3.39 euros. Air France performed nearly as well as the Irish low cost carrier, as it saw its shares jump by 96 cents , representing an increase of 6 percent over previous figures. Lufthansa, the German flag carrier, saw its value rise by 4 percent earlier today.

Analysts like Andrew Fitchie, representing Collin Stewart, predict that if the price oil continues its descent, a number of airlines will see the value of their shares increase on the markets. The price of oil now stands at $128.25 per barrel, which represents a noticeable decrease in its price from its record high value of $147.27, which it reached on July 11^th, 2008. Yet Fitchie noted that the world’s largest carriers are hardly out of the woods just yet. For an airline to simply break even and avoid generating losses, oil would have to settle at around $120 per barrel, but certainly no higher than $125. It remains doubtful that this will occur any time soon, as most observers continue to predict high oil prices and further increases later this year. Ryanair, however, has indicated that it expects to remain in the black this year, so long as the price of fuel does not exceed $130 per barrel.

Thank you to Tracy Alloway of Bloomberg News for the initial reporting.

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