Ryanair saw another €500 million wiped off its market capitalisation yesterday after its share price fell by 6.9 per cent to close in Dublin at €3.65. Ciarán Hancock, Business Affairs Correspondent, reports.
This follows continued weak market sentiment for airlines due to fears over a recession in the UK and United States, high oil prices and a weak set of results from EasyJet on Tuesday.
EasyJet's share price fell by 7.9 per cent in London yesterday, while Aer Lingus shares were down 1.7 per cent at €2.065.
Aer Lingus's price was supported by some brisk activity in its shares. About 18 million shares in the airline changed hands yesterday, with Goodbody Stockbrokers believed to have been involved in the sale of about 17 million to an Irish individual.
This would amount to a stake of about 3.2 per cent. It is understood that the shares were sold by institutional investors.
The identity of the buyer, who would have spent more than €35 million on the stakebuilding, is unknown, but informed sources said it was not Denis O'Brien, who already has a small shareholding in Aer Lingus.
Financier Dermot Desmond was also ruled out by sources.
Ryanair is Aer Lingus's biggest shareholder with a stake of 29.44 per cent, with the government holding 25 per cent.
Ryanair's shares have lost about 27 per cent of their value since the end of 2007, with €1.5 billion wiped off its market value.
Sterling's weakness and fears of a recession in the UK have spooked investors.
Ryanair is also facing increased fuel costs this year when its $65 a barrel hedge expires at the end of March.
In a note to clients yesterday, Citigroup lowered its target price for Ryanair from €6.15 to €4.70, and lowered its earnings forecast for full year 2009 by 14 per cent to 29.9 cent.
Howard Millar, Ryanair's chief financial officer, said bookings over the Christmas period and so far this year have been in line with its expectations.
"In November we said we were happy with our level of bookings, and that trend has continue on into December and January," he added.
