Ryanair stops US investors buying shares

Ryanair, the no-frills Irish airline, has barred US investors from buying any more of its shares because the 50 per cent limit on ownership by non-EU nationals is now dangerously close to being breached.

The move came as the low-cost carrier once again defied the rest of the industry by announcing better-than-expected profits despite higher fuel prices, fears of economic downturn and the outbreak of foot-and-mouth disease.

The ban on further US share purchases takes effect today and means that The Bank of New York will stop issuing further American Depositary Shares (ADS) in exchange for ordinary Ryanair shares until further notice.

Michael O'Leary, Ryanair's chief executive, said that US ownership was now hovering around 49 per cent. "There was a danger that we would have to start phoning US shareholders and informing them their shares would have to be sold to European investors," he said.

Mr O'Leary, who has a 7.5 per cent stake in the airline worth around £200m, said Ryanair was keen to increase ownership by EU nationals to above the 53 per cent level it has averaged since flotation in order to give the airline more "headroom".

But ultimately he said he would like to see the abolition of the "bullshit" rules, which require all EU airlines to be majority-owned by EU nationals in case their aircraft have to be commandeered in times of war.

Pre-tax profits increased 36 per cent to 123m euros, helped by a 35 per cent increase in passenger numbers to 7.4 million and big savings achieved as a result of 70 per cent of tickets being bought through the internet. Ryanair was also been helped by more business passengers trading down from full-service airlines such as British Airways and Alitalia.

Mr O'Leary, forecast that the figure for online bookings would rise to around 75 per cent this year and said that Ryanair's aim was to increase passenger numbers to 9.2 million. Ryanair also plans to launch five or six new routes from Stansted airport and establish a second airport hub on the Continent in addition to its Charleroi base outside Brussels.

Ryanair succeeded in shrugging off the impact of the foot-and-mouth epidemic by lowering air fares in February and March in order to maintain customer numbers. Traffic in both months was up by more than 30 per cent while prices were cut by 7-8 per cent compared with an average reduction over the year of 4-5 per cent. The shares rose 2 per cent to 752.5p yesterday, valuing Ryanair at £2.7bn.