Ryanair ‘one of the only to see profits’ in 2009

RYANAIR will probably be the only airline in the world that will see improved profits in 2009.

This is according to Davy Stockbrokers which said the current oil-price-driven crisis could be the worst ever to hit the airline industry.

It believes Ryanair, Air France, Deutsche Lufthansa and EasyJet are the European airlines most likely to survive as surging fuel costs and slowing economies send more carriers bankrupt.

Davy said long-haul airlines are likely to be the worst affected due to their limited ability to pass on fuel price increases.

“Short-haul is likely to see more rapid market contraction, allowing market leaders to stay profitable and take market share. When hedges unwind next year, almost all of the rest of the industry will be loss-making,” said Davy analyst Stephen Furlong.

It said most oil hedging starts to run out over the summer, leaving the airlines very vulnerable particularly if oil stays high into 2009.

Air France has the best hedging position while Ryanair is possibly the worst hedged, according to Mr Furlong who said that in addition to being unhedged for fuel, Ryanair hedged the dollar on an 18-month rolling programme.

“However, its inherently high margins mean that it stays profitable. In the 2009 year, it will probably be the only airline in the world for which profits actually improve,” he added.

Carriers with poor balance sheets and older planes, including Alitalia and Nordic operator SAS, are the most vulnerable, the analyst said.