‘High oil prices will be good for Ryanair’

RYANAIR boss Michael O’Leary yesterday said the group would not be undermined by rising oil prices that are expected to cost the industry $7 billion in lost profits in 2005.

Mr O’Leary, speaking at the company’s AGM, confidently predicted “high oil prices will be good for Ryanair and bad for our competitors.”

Despite the price hike the group will not revise its current year forecast of 35 million passengers carried and profits of €295 million.

Third-quarter earnings will be flat, reflecting the general state of the market, but “we have no reason to change our forecasts for the current year,” he said.

He was scathing on the State’s decision to give the terminal project to the Dublin Airport Authority.

“The department didn’t have the vision to create a low-cost terminal. They gave us the M50 where the cars don’t fit, the port tunnel where the trucks don’t fit and an airport where the passengers don’t fit.

“Nothing works in Bertie’s blunder land.”

The group is taking the State to court over the way the contract was awarded, but Ryanair would work with the new regime if the plan, when finalised, makes sense, he said.

The length of time to delivery, coupled with the hike in airport charges to fund the project were totally unacceptable, he said.

He would welcome three terminals at the airport “because competition is good for everybody and would bring down costs”

He supports businessman Ulick McEvaddy’s proposal to build a terminal adding that “two was better than one and three was better than two.”

Because of the continuing unsatisfactory situation in Dublin airport, Ryanair has added no routes out of Dublin to overseas destinations for a number of years while it will double the traffic going through Shannon in no time at all, he said.

“It’s the airport’s loss - not ours,” he said.

Within five years Ryanair will be carrying 70 million passengers, equal to KLM and Air France combined.

“We’re going to catch them all eventually.”

He also said the current strike at aircraft manufacturer Boeing, which has disrupted delivery of new aircraft, was not a major concern and that the hiccup will set back delivery times by no more than a few months, in most instances.

The new flight from Dublin to Cork is the exception that proves the rule in the case of the airline’s stance on Dublin airport. This decision was not aimed at Aer Arann, but at CIE.

“Have no doubt about it we’re going after CIE,” said Mr O’Leary, who described a €54 return ticket for a two-and-a-half hour rail journey as “ridiculous.”

During the AGM ordinary shareholders who raised questions appeared to be satisfied customers.

Mr O’Leary neatly sidestepped a probe about the share price, which has struggled to get over €7 for some time, but overall he assured those present that the group’s plans for expansion ranged across the whole of Europe.

Flights lasting more than an hour to an hour-and-a-half were problematic however, he said.

The problem is that consumers have become accustomed to very cheap fares and expect similar rates for flights lasting three hours or longer, which is something the group could not afford, he said.