D Tuesday, February 2, 2010 Business 17 Business Bites BARACK OBAMA yesterday set a budget of nearly $4trillion (2.8trillion) that put getting the millions of jobless Americans back into work at the top of his agenda. His proposed budget would send the US plunging $1.56trillion (1.1trillion) into the red as he borrows heavily to bankroll the job-creation drive. Mr Obama, whose own popularity has taken a battering during his first year in office, plans to tax the wealthy more heavily and cut government projects to help pay to get the more than one in ten unemployed citizens into work. Among the 120 federal projects being cut is the planned manned Moonbase, a flagship proposal of the George W Bush administration. Face plate: Nadia Forde reveals Tote Ireland as the new sponsor of one of Irelands most historic races, the Galway Plate, at a reception in Dublins Buswells Hotel. The deal with Tote, which replaces William Hill, will run for three years and cover the eight races on Tote Ireland Galway Plate Day including the 200,000 Galway Plate Picture: Colm Mahady/ Fennells TOYOTA Motor Corp told dealers in the US they will get parts to fix an accelerator pedal problem by the end of this week. The recall has affected 4.2million vehicles worldwide and 26,000 in Ireland. Toyota determined excess friction in the accelerator pedal assembly could in rare cases cause the pedals to stick. A separate recall involves floor mats that can bend and push down accelerators. The two recalls have affected more than 7million vehicles worldwide. About 3,000 Honda Jazz cars are also subject to a recall in Ireland, but Peugeots and Citrons here are not affected by yet another recall. Toyota promise of recall parts business@metroherald.ie Business & Finance DOWNDOWN v$v$ vv ISEQISEQ by 5.22 at 2,981.47 $1.39 0.87 Ryanair fare cuts helped boost passenger numbers By Kelly MacnamaraBUDGET airline Ryanair yesterday revealed it cut average fares to a record low at the end of last year as it stepped up the battle for recession-hit business. Boss Michael OLeary had pledged to reduce fares in a move to tempt price-conscious passengers and put pressure on competitors. The decision to cut prices to an aver- age 30 in the last quarter of 2009 helped boost passenger numbers, which grew 14 per cent to 16million. Ryanair increased its annual profit expectations yesterday as it posted narrower losses of 10.9million in the third quarter, from 101.5million in the same period a year earlier. Fuel costs were down 37 per cent in the quarter, while average fares dropped 12 per cent, blaming the drop in fares on the recession, price pro- motions and currency fluctuations be- tween the pound and the euro. Takings from extra products and services ancillary revenues grew more slowly than passenger numbers, at six per cent, as customers avoided excess baggage costs and as the ef- fects of the exchange rate between the pound and euro took their toll. Ryanair deputy chief executive Michael Cawley said the firm had seen perhaps some inhibitions in people over spending money on ex- tras like coffees and snacks on board. He said ancillary revenue rates had increased every year for 14 years, but added this cannot continue and hav- ing risen to above 20 per cent of total sales, these were now predicted to steady at around a fifth of turnover. Over the first nine months of its fi- nancial year, the firm said fares were higher than expected at 34. This was driven by better-than- expected demand in some of its conti- nental European markets such as Ger- many, France and Spain, where the firm did not need to reduce prices. It now expects to make a full-year profit in the region of 275million higher than previously thought after yields fell by less than expected. But it said the situation in the UK and Ireland remains weak, with regional airports suffering and fares heavily discounted to stimulate demand. OLeary: Charge less, fly more NEW electronic signatures enabling trustworthy, paperless transactions will now become a reality for many Irish businesses thanks to An Post after it signed a new deal with its subsidiary, Post.Trust. Businesses will now be able to create electronic documents embedded with legally binding digital signatures. Meanwhile, Chambers Ireland has welcomed the Department of Communications Energy and Natural Resources invitation to tender on the national postcodes system but warned the new system must be futureproofed. THREE firms a day went bust last month, with receivers appointed to 21 more as banks moved in to recover spiralling debts. Figures showed a doubling in the number of firms going into receivership in January. A total of 1,406 firms closed in 2009, including 156 five a day in December, InsolvencyJournal.ie said, with construction firms and businesses in Leinster hardest hit. Ken Fennell of Kavanagh Fennell insolvency practice said: Construction is still the worst-affected sector, with 32 firms going out of business in January 33 per cent of the total. THE recession continues to bite, with close to half of all small firms saying credit availability is now worse than six months ago. And 58 per cent of micro-businesses say they are now more likely to shed jobs than six months ago, new research by the County and City Enterprise Boards has found. It said 43 per cent of respondents to the survey conducted in January felt credit availability has worsened, 54 per cent felt conditions are the same and three per cent feel it has improved. Half of respondents said their firms were being curtailed by banking restrictions. THE amount of money borrowed by businesses and households continued to fall in December, with new loans down six per cent for the year. The Central Bank said yesterday two-thirds of the decline in private sector credit was linked to the level of bad debt and loan write-downs by banks. Mortgage lending fell by 19million in December with property debt at 147.7billion falling at an annual rate of 0.3 per cent, compared with the peak of the boom when it was growing at 20 per cent a year. The monthly statistics also showed a fall in consumer spending, with credit card debt down 0.7 per cent over the year to 3.1billion. Borrowing fell 6% in last year Obama budget costs the Moon Agenda: Obama targeting jobless index.html2.html3.html4.html5.html6.html7.html8.html9.html10.html11.html12.html13.html14.html15.html16.html17.html18.html19.html20.html21.html22.html23.html