Ryanair's O'Leary plans for European recession

By Ben Harding

MADRID (Reuters) - Low cost airline Ryanair has factored a European recession lasting up to 18 months into its business plan, its Chief Executive Michael O'Leary said on Tuesday.

O'Leary added he would welcome an economic slowdown across the continent that would make consumers more cost conscious and therefore choose Ryanair.

O'Leary said his sums for the next 12 months were based on the idea that the U.S. and then Europe would go into recession.

"We think the likelihood of a recession in Europe this year is strong," O'Leary said, adding that he expected it to last 12 to 18 months.

"If we don't get one, our results will be better than the numbers we are currently guiding," he told reporters in Madrid after unveiling the Irish airline's fifth Spanish hub in Reus, near Barcelona.

Under Ryanair's worst-case scenario, oil would remain at around $95 a barrel while fares fell 5 percent. That could cut estimated net profits of 470 million euros (350 million pounds) for the current financial year to end-March to around 235 million euros next year, O'Leary said, reiterating a recent warning. Oil cost $93 a barrel on Tuesday.

MORE SPANISH HUBS

Reus is Ryanair's 26th hub and its fifth in Spain.