London - Leading European budget carrier Ryanair saw its net profits almost halved in the first six months of its financial year but its Irish chief executive predicted that the airline would benefit from a recession in which rivals would go bust. Announcing a 47-per cent fall in net profits to 169 million pounds (277 million dollars) between April and September of this year, chief executive Michael O'Leary said he was confident that profits would recover on account of the falling oil price and increased competitiveness in the sector.
The results relate to the period when the oil price peaked at more than 140 US dollars a barrel. They have since fallen to less than 790 pounds a barrel.
"We have a significant cost advantage over our competitors many of whom have hedged fuel next year at significantly higher levels than current market prices," O'Leary said in London Monday.
"This will force competitors to further increase airfares and widen the price gap between them and Ryanair's lowest fares," he added.
O'Leary predicted that as many as 5 or 6 European airlines could go bankrupt between now and Christmas, with just four European airlines, including Dublin-based Ryanair, surviving.
Eventually just British Airways, Germany's Lufthansa, KLM-Air France and Ryanair would survive, he forecast.
O'Leary, well-known for his controversial comments, said he believed that Europe "needed a recession" during which loss-making airlines would disappear and the purchasing of aircraft would become cheaper.
He held out the prospect of a new transatlantic low-cost operation within about 2 to 3 years with economy fares as low as 10 pounds but stressed that this would not be operated by Ryanair and would be a completely separate company.
He said Ryanair expected to make losses over the next six months but would continue to dip fares by between 15 and 20 per cent.
Figures showed that the number of passengers using Ryanair grew by 19 per cent to 32 million between April and September, compared to the same period in 2007.
Despite the economic slowdown, the airline expected passenger figures to rise by a further 9 per cent over the winter months.
O'Leary said Ryanair had completed a "remarkable performance" over the last few months in "very difficult trading conditions."
"We need a recession. We have had 10 years of growth. A recession gets rid of crappy loss-making airlines and it means we can buy aircraft more cheaply," said O'Leary.
