Is Ryanair going to stop expanding?

Ryanair

It appears that the budget Irish airline Ryanair aren't happy despite the fact they've announced profits. They've said that they stop expanding its business if it does not get a better deal on new aircraft from Boeing.

Ryanair is currently in talks with Boeing to buy around 200 aircrafts, but they've said if prices aren't cut, it will return cash to shareholders instead of buying planes, the BBC has reported.

300 percent growth

The warning has come from the company at the same time that they've announced 300 percent profits in six-month profits.

Pre-tax profits came in at 419.4 million euros, up from 105.2 million euros in the same period last year.

Ryanair said that its results were distorted by a 42 percent fall in fuel costs, but added that its average fare had fallen by 17 percent, the BBC also reported.

While the profit figure showed impressive growth from the first half of 2008, it was still 9 percent below the level from the same period of 2007.

Ryanair's passenger numbers rose to 36.4 million in the six-month period, up 15 percent from the same period last year.

The airline is in talks with Boeing about an order for 200 new aircraft to be delivered between 2013 and 2016.

"We won't continue these discussions indefinitely and have signalled to Boeing that if they are not completed before the year end, then Ryanair will end its relationship with Boeing and confirm a series of order deferrals and cancellations," Ryanair boss, Michael O'Leary said in the results statement.

"We see no point in continuing to grow rapidly in a declining yield environment, where our main aircraft partner is unwilling to play its part in our cost reduction programme."

Cut in fares

The company have also warned investors that it plans to cut the average fares by around 20 percent in the next six months, which would mean that it would make a loss in the second half of the year.

The airline said that market conditions were still "difficult" with "an absence of consumer confidence."

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