Belfast Telegraph

Ryanair quashes fresh bid rumour

Budget airline Ryanair has dismissed speculation it is preparing a third bid for fellow Irish carrier Aer Lingus.

The Dublin-based company has failed in two previous attempts to take over Aer Lingus, in which it already holds a 29% stake.

Aer Lingus is currently implementing a major restructuring of its operations, including cutting jobs, with the aim of reducing its operating costs by €97 (£87m) and reversing the €93m loss it posted for the first half of 2009.

The situation has fuelled rumours that Ryanair was set to mount another bid to acquire its rival.

But in an investor update, chief executive Michael O'Leary said: "Our position on Aer Lingus remains unchanged. A third bid is highly unlikely unless or until the Irish Government decides to dispose of its 25% stake in this loss making, increasingly marginalised, regional carrier."

Ryanair, which flies from George Best Belfast City Airport in Northern Ireland, also said in the update that its passenger traffic had increased by 12% in December and by 13% for the whole of 2009.

It carried a total of 65.3 million passengers last year, up seven million on 2008, while passenger numbers rose by more than 500,000 to 4.9 million in December from the same month in 2008.

Ryanair said its load factor - a measure of how well it fills its planes - rose two percentage points to 81%.

"As our December traffic shows, Ryanair is growing strongly and remains on course to carry over 66m passengers in the current fiscal year," it said.

The airline also said it would be able to return more cash to shareholders after the unsuccessful end to talks with Boeing in December over an order for 200 aircraft.

Its planned capital expenditure would decline from €1.2bn in the current year to as little as €100m in the year to March 2013, the chief executive said.

"We expect our current cash reserves of €2.5bn to grow substantially by March 2013 and we plan to distribute surplus cash to shareholders from that date," said Mr O'Leary.

Ryanair also said it had hedged over 50% of its fuel for the year ending March 2011 at $720 per tonne.