Ryanair Flies Low

The budget airline Ryanair has revealed financial returns showing a major nosedive in operating profits.

Ryanair plunged into the red by €169.2 million (£145.9m) in the year to March after being hit with a 59% hike in its fuel bill.

This is more than its bitter rival - Aer Lingus lost - with the flag-carrier recording a loss of almost €120m in 2008, and is said to be facing another loss this year.

However, Ryanair's figures are stark when compared with a profit of €481 million the previous year.

The loss is also being blamed on a hefty writedown on the value of its substantial investment as co-owner in rival Irish carrier Aer Lingus, as well as facing record oil prices.

The company said it had been forced to write down the value of its 29.8% stake in Aer Lingus by a further €222m, after Aer Lingus' share price fell.

But, despite such bad news earlier this year on its overall financial performance, Aer Lingus has recently been celebrating taking 1m bookings in the 18 months since it began operating from its new Belfast hub.

Rival Ryanair - led by boss Michael O'Leary - said it also hoped to see a recovery in the current year, forecasting after tax profits to "at least double" thanks to expected lower fuel costs.

The firm said its fuel costs rose to €1.26bn from €791.3m a year before, as oil prices hit records last summer.

Ryanair's loss was larger than analysts had expected, but by 'stripping out' the impact of the Aer Lingus write down, and other one-off factors, Ryanair made a profit of €105m euros - although still a 78% fall on a year earlier.

Ryanair has had two takeover approaches for Aer Lingus rejected since 2006, the last being turned down in January by the Irish government, which is Aer Lingus' second-largest shareholder.

Ryanair Chief Executive Michael O'Leary recently said that the former flag carrier would be bankrupt within 18 months - despite being a major shareholder.

Ryanair lodged formal complaints with Irish and UK financial authorities alleging Aer Lingus misled the market by presenting overly optimistic forecasts after Ryanair withdrew its takeover bid last year.

See: Aer Lingus Dismisses 'Bankrupt' Claim

See: Aer Lingus Soars With 1m Passengers

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