With oil at $100 Ryanair predicts breaking even

The recent drop in oil prices will bring relief to some of the stronger airlines, Ryanair said on Thursday, as the largest budget carrier in Europe predicted that, if fuel prices stay at current lower levels, it will break even for the year.

Dublin-based Ryanair issued a warning during the summer that it would post its first loss in 20 years at year-end if the price of fuel remained at record-high levels, causing most of its flights to be unprofitable.

The chief executive of Ryanair, Michael O’Leary, had some good news for shareholders at the annual general meeting of the company on Thursday in Dublin. He said that the airline would break even for the year if oil prices stayed at the $100 - or £54.80 – per barrel level this winter.

However, O’Leary also issued warning to holidaymakers nervous about future bookings in the wake of the collapse of XL Airways and Zoom. He said that he fully expects there to be more bankruptcies in the industry in the coming weeks, despite the reduced price of oil.

“We believe there will be further airline bankruptcies in Europe over the coming weeks, as more of Europe’s non-viable, loss making airlines run out of cash or their credit facilities are withdrawn,” he explained.

In repeating a warning that the UK travel giant, TUI Travel, issued last week, the Ryanair chief executive said that both passengers and holidaymakers should limit their travel to financially-secure carriers. He cited Ryanair as an example of a secure choice, as, with cash reserves of £1.6 billion, there is no imminent danger of its collapse.

www.ryanair.com