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Irish Aviation and the Stock Market!
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Message of EI-DUB - Sent 11 May 15:47 |
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Someone recently brought to my attention the recent stock prices of Aer Lingus and Ryanair.
On this date last year their prices (ordinary shares traded on the Irish stock market) were:
Aer Lingus: €3.02
Ryanair: €5.59
Then about 6 months ago on 9th November:
Aer Lingus: € 2.21
Ryanair €5.48
Today their prices:
Aer Lingus: €1.80
Ryanair: € 2.86
I know there are a lot of factors of late, namely fuel prices that are causing airlines to suffer, but in both causes market analysts have pointed the fingers to load factors for both airlines being worrying. While both airlines' prices have fallen, Ryanair's is rather more dramatic.
Yes Ryanair are profitable at the moment, but their fuel supply isn't hedged at all, whereas up until very recently it was. So fuel prices are about to not only eat into profits but devour them.
Equally, their passenger numbers are up, but their load factor (the important numbers!) are down, as are those of EI's longhaul ops.
I don't intend this to be a Ryanair bashing thread, but the way the market looks, people are not liking the direction the company is going, and there are very few indicators that the situation is going to improve soon either ( they are grounding 20 planes this winter on top of the 7 that they have sold on to other operators). Equally another interesting thing is that Michael O'Leary has been extraordinarily quiet of late in the Irish media, to the point where people are nearly wondering where he has gone!!! Some business analysts here are starting to question whether the rapid expansion, and buoyant success was too much and how long until the bubble bursts!
Your thoughts and views are most welcome!
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Message of captain bill - Sent 11 May 21:00 |
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It is felt in some quarters that the EI price of !.80 is for some reason artificially low and for why I don't know as this is not my field. It could be to attract a buyer other than FR or to get FR to dump the stock they own and again encourage a strong buyer into the market.
Load factors are also low on many inter European routes due to the bashing by FR who are also suffering out of DUB in particular due to a turn down in the Irish economy.
You are right as far as FR are concerned. The traveling public are now demanding a little bit more for their money than the poor service standards offered by FR so it will be interesting to see what Mr. O'Leary will do that is if there is anything he can do to revive the fortunes of FR.
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Message of EI-DUB - Sent 12 May 7:53 |
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Ye it was mentioned pre-flotation that the share price would be stable somewhere around the mid €2 mark, so €1.80 is very very low. Equally, some market analysts didn't like the new EI load factors released for the last month, so that might have hit it slightly lower just in the last week or two.
As u said captain bill I think for the first time in many years Ryanair might find itself on hard times. Interesting times ahead.
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