Ryanair - 6
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Corporate finance battles have sometimes gone on for several months before reaching a conclusion. Let this saga run its course...
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FR hedging for 2009
FR has extended its jet fuel hedging position. According to MOL the carrier has secured 50% of its requirement for the first 3 quarters of the fiscal year at $700 per tonne (approximately $64 per barrel).
This will lock in a 42% reduction of Ryanair's hedged fuel cost per passenger compared to fiscal 2008/09 said O'Leary adding that the move would enable Ryanair to grow traffic and reduce fares during the recession.
This will lock in a 42% reduction of Ryanair's hedged fuel cost per passenger compared to fiscal 2008/09 said O'Leary adding that the move would enable Ryanair to grow traffic and reduce fares during the recession.
Join Date: Aug 2004
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The spot price for oil in the USA has dropped to $44/barrel. approximately $64 per barrel is not that good a deal in the short term. In the medium term the oil price will rise as the oil firms have stopped investing in new capacity. It is a very unstable market as high oil prices lead to a massive fall in flying which then lead to a surplus of oil! Low oil prices will cause a year of under investment and reduced capacity in the oil industry. When it looks like the price will rocket the speculators will jump in again.
The one thing that Ryanair did very well at was buy oil hedges at just the best time. It seems to have lost that gift.
The one thing that Ryanair did very well at was buy oil hedges at just the best time. It seems to have lost that gift.
Join Date: Nov 2006
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Racedo
There is a huge difference between CASH as in real cash and
US eximbank "cash"
Thankfully there are accounting standards.
Eventually the truth will emerge
Your question will answer itself!!!!
There is a huge difference between CASH as in real cash and
US eximbank "cash"
Thankfully there are accounting standards.
Eventually the truth will emerge
Your question will answer itself!!!!
45989
Bottom line is that any business that is incapable of generating cash from its existing operations has pretty little future.
As to your claim that somehow FR are hiding liabilities using US Export cash well fraid they are pretty good at declaring their liabilities.Given that one of its finance guy went to EI then if they were hiding stuff he would be more than happy to ensure it gets released.
Good thing about US export bank is that they provide financing at low low rates to ensure US industry get the business, adding in a weak $ to € then FR are well hedged on purchases.
Keep believeing the idea that you burn through your cash and you will survive.....lenders love business like this as they just ask for high interest because even they know its unsustainable.
Bottom line is that any business that is incapable of generating cash from its existing operations has pretty little future.
As to your claim that somehow FR are hiding liabilities using US Export cash well fraid they are pretty good at declaring their liabilities.Given that one of its finance guy went to EI then if they were hiding stuff he would be more than happy to ensure it gets released.
Good thing about US export bank is that they provide financing at low low rates to ensure US industry get the business, adding in a weak $ to € then FR are well hedged on purchases.
Keep believeing the idea that you burn through your cash and you will survive.....lenders love business like this as they just ask for high interest because even they know its unsustainable.
Join Date: Jul 2003
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befree...you clearly don't understand the oil markets and just how good the FR position is in relation to its competitors.
The current spot price bears only a passing relationship to the future hedge price as this is dependant on what is expected to happen and how the speculators respond to that. FR have bought at a price that Easy can only dream of as Easy have hedged 60% of their S09 requirement at $1200 compared to $700 of FR....and FR have lost their touch??
As for the oil companies not adding capacity....that doesn't matter as the supply of oil is more than sufficient for current demand and the demand for the foreseeable future therefore there is no upward pressure on the price of oil. US oil stockpiles are rising and we're in the middle of a global recession. Who's need for oil is increasing?
If MOL really wants to hurt Easy he's got all the tools available to do it and Easy can do nothing to prevent it except bleed cash.
The current spot price bears only a passing relationship to the future hedge price as this is dependant on what is expected to happen and how the speculators respond to that. FR have bought at a price that Easy can only dream of as Easy have hedged 60% of their S09 requirement at $1200 compared to $700 of FR....and FR have lost their touch??
As for the oil companies not adding capacity....that doesn't matter as the supply of oil is more than sufficient for current demand and the demand for the foreseeable future therefore there is no upward pressure on the price of oil. US oil stockpiles are rising and we're in the middle of a global recession. Who's need for oil is increasing?
If MOL really wants to hurt Easy he's got all the tools available to do it and Easy can do nothing to prevent it except bleed cash.
Join Date: Mar 2007
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The thing between FR and U2 is that they generally serve different people.
We have seen over the last few years that there is easily capacity for both carriers.
Absolute rubbish. MOL does have a lot of power against carriers like Jet2, SkyEurope etc. etc. but when they pit it against U2 there is not much chance they are going to fight them out of the market.
If you can explain to me how FR can force U2 out of airports such as LGW and AGP where they have VERY lucrative routes which fund a lot of their revenue then I think even MOL would love to hear from you! Even he has admitted that U2 will still be around when he named the airlines that would be left after the recession.
We have seen over the last few years that there is easily capacity for both carriers.
If MOL really wants to hurt Easy he's got all the tools available to do it and Easy can do nothing to prevent it except bleed cash.
If you can explain to me how FR can force U2 out of airports such as LGW and AGP where they have VERY lucrative routes which fund a lot of their revenue then I think even MOL would love to hear from you! Even he has admitted that U2 will still be around when he named the airlines that would be left after the recession.
Join Date: Mar 2008
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easyJet compete directly with Ryanair on 6 routes out of Liverpool and U2 remain the dominate carrier on all the routes and has even seen ryanair retreat from the Liverpool to Faro route this summer after only 6 months on the route.
Even he has admitted that U2 will still be around when he named the airlines that would be left after the recession.
I wonder at an EZY/BA tie up as strangely seems to fit.
Thread Starter
Join Date: Nov 2006
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So which airline has generated Cash form its existing operations and which one is digging into its reserves ?
EI has watched its passenger numbers fall through the floor and now commits itself to a second expansion when the first hasn't worked.
EI has to pay millions to sack staff and hope that its cost cutting works.
So you really want to go with the losses idea ????
EI has watched its passenger numbers fall through the floor and now commits itself to a second expansion when the first hasn't worked.
EI has to pay millions to sack staff and hope that its cost cutting works.
So you really want to go with the losses idea ????
Have you heard of global credit crunch? Have you heard of most firms talking of survival this year rather than profitability. Many businesses and especially airlines are not generating cash, and as a result the ones that have 'reserves' will survive.
You are so down on Aer Lingus. This may come as news but the competitors at Belfast of Aer Lingus are in a similar position, Easyjet and Ryanair included. So dont forget to say that the bases for other airlines at Belfast are 'not working' also.
Aer Lingus have been robust to survive and amass a significant bank balance alongside Ryanair at Dublin airport. If Aer Lingus is such a basket case why does MOL want it so bad???
Gatwick will do comfortably well, a combination of Aer Lingus' low cost base, low fares and civilised service will deliver a success story. Possibility of Cooperation with BA will also yield fruit.
Finally, re your comments about spending millions on 'sacking staff' in a hope it works. Again back to my first point, credit crunch, review of costs etc. Aer Lingus is addressing its cost base to secure its survival in the future.
I wish you would cut Aer Lingus some slack.....
Finally, re your comments about spending millions on 'sacking staff' in a hope it works. Again back to my first point, credit crunch, review of costs etc. Aer Lingus is addressing its cost base to secure its survival in the future.
Join Date: Feb 2008
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Its so interesting - I'm reading a book about Ryanair at the moment, and the early chapters are dominated by Ryanair's fight to survive against a powerful Aer Lingus in DUB on the DUB LON market back in the late 80's. It was actually pot luck Ryanair even survived, when it was granted exclusive rights into STN and Aer Lingus were told they had to leave the Essex airport for something like 3 years. Imagine if that hadn't have happened - who ever would have thought it would be the other way around now - with the possibility of Ryanair taking over Aer Lingus.
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Please focus on the arguments and content and do not resort to personal attacks. Two posts have now been deleted. The Site takes seriously any attempt to "out" or reveal the identity of a member contributing to this forum and Moderators will sanction individuals who persist with this type of discussion.
Thank you
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The big retreat from HHN to be announced on Tuesday
Next Tuesday (Jan 13th) Ryanair's Deputy Chief Executive Officer Michael Cawley will held the press conference in Germany (HHN), to make a "significant announcement for Frankfurt-Hahn". The conference starts at 11:30, the announcement will give the details of already-hinted retreat from this important FR's stronghold in Germany. It could be a very severe move, as rumoured. Job losses, a large number of flight/route cancellations expected, several planes based there will be transferred to other airports. The assembly of all local Ryanair staff and management will take place one hour before the press event in Hahn Meeting Center.
The official reason: so called Hahn-Taler, a new passenger fee.
The official reason: so called Hahn-Taler, a new passenger fee.
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To be fair - most airports that are served by Ryanair charge higher fees than HHN ...here in France Marseille charges a whopping 32 €/pax..while HHN is just requesting half of that amount.Now that they want to increase 3 €/pax,Ryanair threatens to pull out 6 planes -ridicoulous !!!
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HHN
Ryanair have already acknowledged that Hahn is one of their two loss making bases (the other being Shannon). Here is their chance to kill off all the underperforming routes from Hahn.
Leaving aside the usual discussion of loads vs yields as I don't have any data for the latter, here are the worst performing routes from Hahn for 2008 (Jan - Oct) in terms of load factor, worst first:
Klagenfurt*, Lubeck*, Verona, Prague*, Skavsta, Wroclaw, Bratislava, Birmingham*, Bergamo, Dublin, Prestwick, Manchester*, Balaton, Torp, Berlin, Stansted, Forli#, Madrid, Santander, Gdansk
And here are the best load factors from Hahn, highest first:
Porto, Bari, Tampere, Tenerife, Seville, Fez, Rome CIA, Malaga, Faro, Marrakesh, Jerez, Trapani, Fuerteventura#, Treviso, Valencia
# = already binned
* = new route (Oct 08), so not a very fair comparison
It will be interesting to see where the axe falls.
Leaving aside the usual discussion of loads vs yields as I don't have any data for the latter, here are the worst performing routes from Hahn for 2008 (Jan - Oct) in terms of load factor, worst first:
Klagenfurt*, Lubeck*, Verona, Prague*, Skavsta, Wroclaw, Bratislava, Birmingham*, Bergamo, Dublin, Prestwick, Manchester*, Balaton, Torp, Berlin, Stansted, Forli#, Madrid, Santander, Gdansk
And here are the best load factors from Hahn, highest first:
Porto, Bari, Tampere, Tenerife, Seville, Fez, Rome CIA, Malaga, Faro, Marrakesh, Jerez, Trapani, Fuerteventura#, Treviso, Valencia
# = already binned
* = new route (Oct 08), so not a very fair comparison
It will be interesting to see where the axe falls.
Just read about RYR and HHN and I gotta say I kind of agree with RYR on this one. Why do airports insist on charging airlines for passengers coming through their doors. It's a rip off to say its for improvement etc. When you catch a train do you pay 3 euro to go through the train station? When you go to a shopping center do you pay to shop there? Of course not so I don't see why an airport should charge for pax. Surely their business model and thus fees they charge to the airlines should reflect the cost of improvements, upkeep ie the cost of providing the service?
Why oh why do airports see passengers as an easy source of revenue that has to be squeezed for all its worth? Unfortunately HHN will probably go down the BAA route where fees go up every year for worse and worse performance and where a passenger is seen a s a money making tool.
Why oh why do airports see passengers as an easy source of revenue that has to be squeezed for all its worth? Unfortunately HHN will probably go down the BAA route where fees go up every year for worse and worse performance and where a passenger is seen a s a money making tool.