Ryanair forecasts at least €200m profit if fuel stays stable

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Irish budget carrier Ryanair is forecasting a €200-300 million ($280-425 million) after-tax profit for the current fiscal year, on the basis of a potential €450 million reduction in fuel costs as well as yield expectations.

The carrier - which is claiming a full-year net profit of €105 million for 2008-09, discounting exceptional items - says it predicts a 15% rise in passenger numbers to 67 million. It expects operating costs per passenger, outside of fuel, to fall by about 5%.

Ryanair adds that the fall in fuel prices has "encouraged" the airline to restart a hedging programme, and the carrier says it is 90% hedged for the first three quarters of the year.

It admits that its yield expectations "carry a heavy health warning" and that it still has "limited visibility" on bookings, but it is nevertheless expecting to "at least double" its profit figure.

Ryanair's expenses of €2.8 billion were up by 29%, cutting its operating profit to €144 million. Fuel costs of €1.26 billion accounted for 45% of operating expenditure.

But the airline also suffered exceptional costs including an "accelerated" depreciation of €51.6 million on aircraft disposals, and posted a €222.5 million writedown on its investment in flag-carrier Aer Lingus, to €93.2 million.

These items dragged Ryanair into a pre-tax loss of €180.5 million. Chief executive Michael O'Leary nevertheless describes the airline's performance as "robust" and says the figures demonstrate the "fundamental strength" of Ryanair's business model.

Ryanair's ancillary revenues rose by nearly a quarter to just under €600 million, and the carrier says this means it has reached a target contribution to overall revenues of 20% a year ahead of schedule.