UPDATE 3-Ryanair warns on growth in price battle with Boeing
* H1 adjusted net profit up 80 pct as fuel costs fall 42 pct
* Keeps year profit forecast at low end of 200-300 mln euros
* Mulls ending strategy of rapid growth as yields decline
* Bargaining with Boeing on 200 extra aircraft from 2013
* Shares down 4.4 percent
(Adds analyst comment)
DUBLIN, Nov 2 (Reuters) - Irish budget airline Ryanair (RYA.I) sent a fresh warning to planemaker Boeing (BA.N) over a large order, saying it could curb its once unstoppable growth as limits emerge in its quest for cutting costs.
Ryanair, already close to being Europe's biggest airline, said on Monday it still saw "massive" expansion opportunities, but analysts said it could not sustain a 15 percent annual rate of traffic growth without cutting fares too low to make money.
"It's difficult to see how they can keep squeezing costs out of the business," said Panmure Gordon analyst Gert Zonneveld. "At the end of the day, you need your two pilots, you need a number of crew per aircraft."
Shares in Ryanair fell 4 percent after it failed to meet expectations it would raise its full-year outlook and as an 80 percent rise in first-half profit owed much to cheaper fuel and belied falling fares and revenue.
Ryanair said talks with Boeing on ordering 200 aircraft for 2013-16 delivery had not progressed much, adding it could end its traditional relationship with the U.S. aircraft maker.
"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," chief executive Michael O'Leary said.
"If we cannot invest our surplus cash efficiently in new aircraft, then we should distribute it to shareholders," said O'Leary, who has so far stuck to building Ryanair's 2.5 billion euro cash pile further without paying any dividends.
BOEING VS AIRBUS Continued...
