Irish based airline Ryanair have warned shareholders that the business may make it’s first loss since 1989, as it aims to cut fares in the face of high fuel costs and looming recession.
Ryanair chief executive Michael O’Leary has made it quite clear that he intends to increase the company’s market share by reducing fares at a time when competitors are struggling to hold their own.
The low cost carrier has an advantage over many rivals by having a considerable cash cushion of around £1.74bn, and can afford to slash profits in an effort to further build the business in these unpredictable times.
Ryanair shares took a knock of 25% on issue of the warning over profits, which are expected to show an 85% decrease in first quarter net profit. Experts believe that the airline is well placed to tough out the downturn and many consider the company to have the strongest business model and balance sheet to withstand and benefit from the times of crisis.
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