Ryanair forsees bloodbath for European airlines

Ryanair, the low-cost Irish airline, yesterday warned of a "bloodbath" among European carriers as it reported its first quarterly loss since flotation seven years ago.

Losses in the final quarter from January to March were $3.5m (NZ$6.8m). The three-month loss helped contribute to Ryanair's first fall in annual profits for 15 years after a year in which the airline's average fares fell 14 per cent and the industry as a whole was riven by surging fuel costs, the war in Iraq and threat of terrorist attacks.

Pre-tax profits for the year fell 14 per cent to $228.5m although on an after-tax, pre-exceptional basis - Ryanair's preferred measure - the decline was a smaller-than-expected 5 per cent.

Michael O'Leary, Ryanair's chief executive, predicted that Ryanair's own fares would fall by another 5-8 per cent this year. "It's a bloodbath out there and it's going to continue," he said.

"It's a very shitty marketplace with fare wars breaking out all over the place. But we look forward to that because we remain convinced that the lowest cost operator will win."

- INDEPENDENT