Ryanair's shares plummet

Ryanair’s share price has plunged by almost a third after the Irish low-cost carrier gave its first ever profit warning.

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By  Neil Denslow Published  January 29, 2004

Ryanair’s share price plunged by almost a third after the Irish low-cost carrier gave its first ever profit warning. The airline said that annual profits would fall by as much as 10% after it slashed fares by almost a third "It's intensely competitive out there," says Michael O'Leary Ryainair’s chief executive. According to Bloomberg, his 6% stake in the airline lost about e80 million (US$ 100 million) of value on the day. "Our response to these market conditions will be to continue to lower fares and yields," O’Leary adds. The Irish airline's had been a stock market favourite after it earnings rose every year since it listed in 1997. However, the carrier's policy offering of low fares in Europe has now been widely copied and mainline carriers are also cutting prices, so its profits are now being severely squeezed. "Ryanair has been a growth story which seems to have come to an end," Alan Beaney, an investment manger at Principal Investment Management told Bloomberg. "To keep passenger numbers growing, Ryanair is having to cut prices at the expense of revenue."

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