Ryanair posted an 80 per cent rise in first-half profit and said it could reverse its long-standing strategy of rapid growth and distribute cash to shareholders instead.
The company said fiscal second-quarter profit rose 35 per cent as the company spent less on fuel. Net income in the three months ended September 30th increased to €250.5 million ($370 million) from €185.8 million a year earlier, the Dublin-based carrier said in a statement.
Sales fell 4 per cent to €992.1 million, however, and Ryanair said it might throttle back on the expansion strategy, warning that the 80 per cent rise in first-half profit was driven by lower oil prices and masked falling fares.
Ryanair fell 9.7 cents, or 3.3 per cent, to €2.85 as of 10.20am in Dublin. The stock has fallen 4 per cent this year, giving it a market value of €4.2 billion.
Ryanair said it was still winning substantial market share from major flag carriers Air France-KLM, British Airways and Deutsche Lufthansa. But it said its first half profit rise had been helped by a 42 per cent fall in fuel costs and masked a 17 per cent decline in fares, with that fall in ticket prices set to accelerate in the second half.
Ryanair used hedging contracts to lock in lower costs for fuel as the price of crude oil tumbled in the second half of 2008. The savings offset a 17 per cent decline in first-half average ticket prices as the carrier cut fares to lure travellers amid the recession.
"Market conditions in Ireland, the UK and Europe continue to be difficult," CEO Michael O'Leary said in the statement. "These results are heavily distorted by a 42 per cent fall in fuel costs."
The airline said it has made "little progress" in negotiations with Chicago-based Boeing on an order for 200 aircraft for delivery between 2013 and 2016, it said. The carrier said it has told the plane-maker that if talks are not completed before year-end it will defer and cancel existing orders.
The carrier predicted on October 13th that it will serve 66 million passengers in the year through December, a 14 per cent increase from 2008. The forecast was a reduction from the carrier's earlier prediction that passenger numbers would reach 67 million travellers this year.
Mr O'Leary also called on the Government to scrap "stupid" tourist taxes and reduce airport charges. In a statement he said specific markets like Ireland and the United Kingdom had been been damaged by "misguided tourist taxes" levied on air passengers but not on competing ferry or train journeys.
Also speaking this morning, Michael Cawley, Ryanair deputy chief executive, said the company's enthusiasm was "waning by the day" over an Aer Lingus deal, with Ryanair "very unlikely" to make another offer for its competitor.
However, speaking on Morning Ireland, Mr Cawley said a bail-out of Aer Lingus was "only a question of time" and that Ryanair would examine a bail-out if the Government asked it to do so.
Ryanair logged its first annual loss last year partly because of a decision against hedging while oil prices were rising to a record $147.27 a barrel in July 2008.
Agencies