After a stunning start to its life as a plc, Ryanair has had a more problematic last three months, with the shares well off the 615p high of mid-1998 and under-performing the Irish market by 15 per cent in the three-month period. Nothing wrong with Ryanair's recent results, but there is just a bit of concern creeping in about future prospects, and particularly the impact of sterling on its operations.

Regrettably, few analysts in the Republic are able to bring themselves to use the awful word "sell" about stocks, but Dolmen Butler Briscoe had no such inhibitions this week when it told clients to sell Ryanair. Mind you, the Dolmen view about Ryanair is in direct contrast to a recent "buy" note from Merrill Lynch, so it depends on which analyst you believe.

Dolmen is happy about Ryanair's recent half-year results, but warned this week: "There are several negative factors which now present a less than encouraging backdrop to the group's prospects and valuation."

These factors include increased competition in the low-cost sector of the industry although Ryanair has yet to go head-to-head on any route against other low-cost operators like Go, easyJet and Debonair. Dolmen has also emphasised the sterling weakness factor for Ryanair, given that around 60 per cent of the airline's exposure is to Britain.

Other factors cited by Dolmen include higher depreciation charges on the new aircraft which will join the fleet next year and upward pressure on oil prices. But Dolmen also emphasises that the increasing length of Ryanair's flights to service more distant destinations in Europe will result in a decrease in revenue per available seat mile or revenue per unit capacity.

Current Account shares some of Dolmen's concerns about the short-term prospects for Ryanair, but would baulk at urging a "sell". Holders of Ryanair shares might be better advised to simply hold on to what they have.

Ryanair is an illiquid stock, with the Ryan family holding almost 28 per cent, David Bonderman's Irish Air more than 10 per cent and chief executive, Mr Michael O'Leary, in excess of 12 per cent. That means that almost 50 per cent of the shares are locked away, leaving Ryanair with a free float of just 50 per cent.

The danger of selling out now is that it might be difficult to buy back in again to take advantage of a later recovery in the Ryanair share price. Hold!