Bad publicity benefits Ryanair stock

While Ryanair has announced it is suing Channel 4 for their portrayal of the airline, Merrion Capital believe that the bad publicity makes for a good investment opportunity.

In a broker’s note, Merrion analyst David Holohan said that the programme shed little new light on any of the airlines practices that were not already in the public domain. Mr Holohan said that any movement in the stock price as a fall-out from the programme would give investors an opportunity to make a good return.

“Ultimately, Ryanair has an unblemished flight safety record and management are well aware that maintaining this is of paramount importance.

“While Ryanair benefits from being Europe’s lowest fare carrier, if passengers were to associate low fares with low safety standards it would be the end of the Ryanair business model and management are of course aware of this.

“Any weakness in the share price as a result of the media coverage that yesterday’s programme (FT, Daily Telegraph) resulted in presents an attractive entry point to the stock,” he said.

Management have been vigorous in defending their record and are in the process of issuing legal proceedings against Channel 4 for broadcasting the Dispatches “Secrets from the Cockpit” programme. Ryanair have strongly denied the allegation levelled at them in the programme, which focused on three flights in Spain that called in fuel maydays.

Ryanair’s Robin Kiely said “Since the Channel 4 Dispatches programme (which previously used actors to promote equally false claims about Ryanair’s cabin crew) has published these false anonymous hearsay claims, and the bogus results of an unreliable, fabricated survey prepared by the European pilot trade union club, Ryanair has instructed its lawyers to issue legal proceedings against Channel 4 Dispatches for defamation and Ryanair looks forward to this matter being resolved in the courts,” he said.

Correspondence between Ryanair and Channel 4 in the lead up to the programme reveal that Ryanair had written to the head of Channel 4 and the British broadcasting authority, Ofcom, warning that if the episode was aired Ryanair would take legal action.

A spokesperson for Channel 4 said that they stand over the findings and intend to fight any case brought by Ryanair.