Ryanair profits up 59%, aims for more growth DUBLIN (Reuters) =97 European no-frills airline Ryanair reported a 59% jump= =20 in net profits on Tuesday but its shares fell sharply as it fired the first= =20 shot in a new fares war and said profit growth this year could fall to 10%.= =20 "Our aim is not to kill anyone (of our competitors) but it is to grow=20 aggressively. We're going to destroy the airline business as we know it,"=20 Chief Executive Officer Michael O'Leary told Reuters as he initiated more=20 fare-cutting to spur growth, starting with an offer of a million one-way=20 tickets for 19.99 to 29.99 British pounds apiece. O'Leary said he expected= =20 the carrier, closely modelled on U.S. no-frills pioneer Southwest, to grow= =20 passenger volumes by 50% this year to 24 million. As a result Ryanair would= =20 rival Air France on traffic volumes and would soon overtake number one=20 Lufthansa and number two British Airways as Europe's biggest scheduled=20 international carrier. But O'Leary warned in London that Ryanair's profit=20 growth would dip sharply after the rise last year, when analysts said=20 Ryanair had a very profitable summer. O'Leary said the aim was for net profit growth of 20% for the year to=20 end-March 2004, up from 239.4 million euros last year, but with the=20 weakness of the British pound against the euro "it will be somewhere in the= =20 region of 10%." "I think a lot of people were in the 15 to 20% growth=20 range; we're now talking closer to 10," said analyst Shane Matthews at NCB= =20 Stockbrokers in Dublin. "In general terms it's disappointing although the=20 reality is that they are still going to give you positive earnings growth."= =20 The efficiencies of the young low-cost airlines like Ryanair and easyJet=20 are the envy of traditional airlines saddled with old-fashioned cost=20 structures and suffering from poor demand for full-service air travel due=20 to weak economies and the impact of the SARS virus. But O'Leary warned that= =20 Ryanair could not be expected to replicate the sizzling growth of the past= =20 fiscal year ended March 31, which translated into net margins of 28%. "We=20 have repeatedly stated that profit margins of almost 30% are a one-off and= =20 non-sustainable." He said the company hoped realistically to grow traffic=20 at about 25% annually and to maintain profit margins, after taxes, at about= =20 20%. "I personally expect no near-term improvement in either the low-fare=20 environment or the strength of the euro, and believe therefore that=20 (average fare) yields for the year will continue to be 10 to 15% lower than= =20 last year," O'Leary added. Analysts said they had expected the company to=20 announce some erosion in average fare yields for the year ahead, but also=20 said Ryanair typically has been cautious in its predictions. "In the short= =20 term the note is cautious but it's a super company and the long-term=20 business model is very much intact," said analyst John Mattimoe at Merrion= =20 Capital in Dublin. O'Leary said he was confident of carrying more than 30=20 million international scheduled passengers within three years, at which=20 point Ryanair would overtake Lufthansa and British Airways as the biggest=20 international carrier in Europe. Ryanair is already the world's third=20 biggest passenger airline by share value with a market capitalisation of=20 some five billion dollars. It traditionally does not pay dividends and=20 stuck to that policy for the fiscal year just ended. *************************************************** The owner of Roger's Trinbago Site/TnTisland.com Roj (Roger James) escape email mailto:ejames@xxxxxxxxx Trinbago site: www.tntisland.com Carib Brass Ctn site www.tntisland.com/caribbeanbrassconnection/ Steel Expressions www.mts.net/~ejames/se/ Mas Site: www.tntisland.com/tntrecords/mas2003/ Site of the Week: http://www.natalielaughlin.com/ TnT Webdirectory: http://search.co.tt *********************************************************