RYANAIR CHIEF executive Michael O’Leary has predicted that Aer Lingus will announce after- tax losses of €100-€150 million when the company publishes its full-year results next Wednesday.
He says this will be the result of a €100 million exceptional charge related to restructuring within Aer Lingus; a decline in passenger numbers and average fares, losses incurred at its base in Belfast and high fuel charges.
Mr O’Leary said yesterday that this would contradict comments made by Aer Lingus chairman Colm Barrington during the recent takeover battle for the airline. In a letter sent to shareholders on December 22nd, Mr Barrington said: “We expect to achieve a profit overall in 2008.”
Mr O’Leary said other claims made by Mr Barrington at that time in relation to Aer Lingus’s cash pile (he expects it to be about €650 million rather than the €803 million stated by Aer Lingus in December) and how the business continues to expand (its traffic numbers have declined in each of the past three months) were “misleading” and he said Ryanair would lodge complaints with various regulatory authorities.
“We are going to jump all over them for misleading shareholders, misleading the stock exchange and misleading the markets,” he said. Mr O’Leary also predicted that Aer Lingus would guide investors of “further losses in 2009”.
Aer Lingus declined to comment on Mr O’Leary’s remarks. “We will be commencing a roadshow immediately after we release our results next week,” said Enda Corneille, its corporate affairs director. “We won’t be communicating with our shareholders before then.”
Mr O’Leary said Ryanair would write off more of its investment in Aer Lingus when its financial year closes at the end of March. He estimated this would amount to about €70 million. Ryanair has already written off €185 million of its €411 million investment in Aer Lingus.
When asked about the investment, Mr O’Leary replied: “It was a stupid investment at the time. I still think the strategy was right . . . but, as an investment, it has proved to be a disaster.”
Aer Lingus shares closed yesterday at 76 cents, down 6 per cent.
