Analysts cut Ryanair forecast for third time over fuel costs
22.03.08
Dublin based stockbroker Goodbody has cut its Ryanair forecasts for the third time in three months, the Irish Independent reports. But it still believes the Irish airline will emerge from the current aviation crisis ‘stronger and fitter’ than ever.
Goodbody's analyst Joe Gill, traditionally one of Ryanair's most bullish commentators, believes the airline's earnings per share will plunge by 48 percent in the year ending March 2009. The prediction is based on a new assumption of jet fuel staying at $1000 a ton, as forecast by easyJet earlier this week.
Mr Gill's research note adds: ‘While this profit decline is dramatic, it should be judged against how the airline industry normally behaves during a cost/revenue crisis. Heavy losses are incurred and weaker carriers disappear.'
'Our new forecast implies Ryanair stays profitable at a time when oil prices are at record highs and consumer sentiment is weak. On the assumption that oil normalises, we expect a sharp profit recovery at Ryanair as it continues to grow while competitors stall or exit the industry entirely.’
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