Ryanair 2008 Annual Report Download - page 5

Download and view the complete annual report

Please find page 5 of the 2008 Ryanair annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 96

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96

5
If fuel prices remain at or above $130 per barrel then we will suffer a substantial reduction in
profitability. We anticipate that consumer demand will weaken this year as a result of higher oil prices
and the credit crisis. Based on our current fuel hedging position and fares falling by 5% we expect to
record a full year result of between breakeven and a loss of 160m. We believe that higher oil prices will
not signal the end of low fare air travel, but it will stimulate our growth as passengers switch to Ryanair
to avoid our competitors higher prices and fuel surcharges. If oil remains above $130 per barrel this
winter then we anticipate that there will be significant capacity reductions in the European airline
industry as airlines merge, consolidate or exit the industry.
The airlines who will survive in an era of much higher oil prices will be those who have a
sustainable business model, lower costs and a strong balance sheet, like Ryanair. We plan to continue to
expand Ryanair’s “lowest fares” model despite these difficult trading conditions. We believe that the
strength of our lowest fare model and the dedication of our outstanding team of people will prevail, to
continue the Ryanair air travel revolution across Europe.
Yours sincerely,
David Bonderman
Chairman