RYANAIR REPORTED its first full-year loss in 20 years yesterday after writing down the value of its 29.8 per cent stake in Aer Lingus by €222 million.

This left Ryanair with a net loss of €169.2 million for the 12 months to the end of March 2009.

But there was better news from Ryanair for the current financial year. It is predicting profits of between €200 million and €300 million depending on fuel costs and average fares.

Ryanair said it expects passenger traffic to grow by 15 per cent to €67 million in the current 12-month period.

It has hedged 90 per cent of its fuel requirement for the first nine months of the financial year – which ends on March 31st, 2010 – at $62 a barrel and said its fuel bill would decline by €450 million if oil prices remain at current levels.

Fares, however, will remain under pressure. “We expect that a combination of a deep recession, weaker sterling and our own capacity growth will cause average fares to fall by between 15 per cent to 20 per cent this year to as little as €32 per passenger,” Ryanair said.

When the hit on its Aer Lingus investment is stripped out of this year’s results, Ryanair made an after-tax profit of €104.9 million. This compared with a surplus of €480.9 million in the previous 12-month period.

The steep decline in profitability was due to a 59 per cent rise in its fuel costs, which soared by €466 million to €1.26 billion.

While passenger traffic increased by 15 per cent to 58.5 million, Ryanair’s average fare declined by 8 per cent to €40 as the airline continued to aggressively discount the price of its seats in a bid to fill its planes.

On a positive note, Ryanair reduced its non-fuel costs by 3 per cent last year, while its revenues rose by 8 per cent to €2.7 billion.

Chief executive Michael O’Leary described the results as a “robust performance”.

In the financial year just passed, Ryanair added 18 net new aircraft to its fleet, opened six bases and launched 223 new routes.

Ryanair also made a failed €1.40-a-share bid for Aer Lingus, which was pulled in January. Its stake in Aer Lingus is now valued at just €93 million on its books.

“We remain deeply concerned about the future of Aer Lingus, which continues to lose traffic, suffer rising losses and falling cash balances under a board that has shown it has no vision,” Ryanair said.

At a press conference in Dublin yesterday, Ryanair’s deputy chief executive Michael Cawley said: “We regret the fall in value , there’s no point in denying the obvious.”

Mr Cawley called on the Government to abolish the recently-introduced €10 air travel tax, describing it as “suicidal” for the Irish tourism industry.

He said the tax and the level of airport charges imposed here meant Ryanair would not be increasing its services out of Dublin or Cork airports.

In relation to Shannon, Mr Cawley said Ryanair’s five-year deal was due to conclude at the end of April 2010. “We are going to try and secure a substantial cost reduction there,” Mr Cawley said of talks on a new deal with the Shannon Airport Authority. “If we don’t, we will have to look at our capacity there.”

Ryanair pays Shannon a charge of about €1 a passenger. When asked what figure Ryanair would like under a new deal, Mr Cawley said: “Free would be a good start. We would have great difficulty accepting anything above free at the moment.”

Mr Cawley said Ryanair handled around 1.2 million passengers at Shannon in the year to the end of April 2009 compared with 1.9 million in the previous period. In recent times, the airline has reduced the number of aircraft at Shannon from six to four.

Ryanair at a glance

Turnover:$1bn (+32%)

Operating loss:$109m (-40%)

Net loss:$71m (-82%)

Loss per share:15 cents (-83%)

Dividend per share:n/a

Summary:

Ryanair bucked the trend among European airlines by reporting a profit, before exceptional items, for the year to the end of March 2009.

It is one of the few airlines increasing its capacity and its sustained growth over recent years has seen it become Europe’s biggest carrier both in terms of traffic and market value. This trend should continue in the current year.