Ryanair issues threat to Boeing over planes

RYANAIR, the European budget airline run by colourful Michael O&rsquo;Leary, signalled a U-turn in its growth plans yesterday, saying it might stop expanding if it fails to negotiate a better deal with Boeing on new aircraft.<br /><br />The carrier, which has been following an aggressive growth-plan despite the slump, is talking to the US planemaker about buying up 200 aircraft. But O&rsquo;Leary said yesterday it would return cash to its investors rather than purchasing the planes if Boeing would not slash the price of the jets.<br /><br />&ldquo;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,&rdquo; he said. O&rsquo;Leary owns five per cent of Ryanair, and would be one of the biggest beneficiaries if the airline started paying dividends.<br /><br />He said he was &ldquo;optimistic but not confident&rdquo; on reaching a deal with Boeing.<br /><br />The chief executive was speaking as Ryanair unveiled six-month pre-tax profits of &euro;419.4m (&pound;376.2m), up from &euro;105.2m in the same period last year. <br /><br />O&rsquo;Leary said the results were distorted by a massive slump in fuel costs over the period, adding that average fares had dropped 17 per cent.<br /><br />&ldquo;The outlook is grim, which is great for our business. We love recessions, we love downturns, that&rsquo;s when we like to grow and order more aircraft,&rdquo; he said.<br /><br />The airline also warned shareholders it would cut fares over the next six months, and forecast a loss for the second half of the year. <br /><br />Despite warning that Ryanair might stall its growth plans, O&rsquo;Leary said he expected it to become the number one carrier in both Italy and Spain by the end of 2010. It currently has a 19 and 13 per cent market share in both countries respectively. <br /><br />He also spoke out on the upcoming Copenhagen climate change conference, which kicks off next month to much fanfare. <br /><br />&ldquo;I would not cross the road to get to Copenhagen... it&rsquo;s just a talking shop for imbeciles,&rdquo; he said.