Airline price war looms after Ryanair pledge

Airline price war looms after Ryanair pledge

Air fares are to be cut by an average of 7% this summer by Ryanair, raising the prospect of a further price war between airlines.

The Irish no-frills carrier said it would drop fares to keep its aircraft full, with demand hit by economic uncertainty and terror attacks, as lower fuel costs cut the cost of flying.

Ryanair, Europe’s biggest airline by passenger numbers, expects prices to drop by around 5%-7% this summer, and as much as 12% in the winter.

Speaking after announcing annual results on Monday, chief executive Michael O’Leary said that fares would be lower primarily because of extra supply of seats, in Ryanair’s fleet and others, while lower oil prices were filtering through to cut costs.

The airline has taken delivery of 41 new Boeing 737s in the last year with a further 52 coming this year, as it looks to grow passenger numbers to more than 100 million.

“It’s good, because customers are going to get lower air fares and it also puts downwards pressure on our competitors,” O’Leary told The Guardian.

O’Leary revealed that Thursday’s EgyptAir disaster had also affected bookings.

“It has already had an affect on business, bookings were weak on Thursday, Friday, Saturday. We respond by lowering fares and bookings return to normal, but at lower prices,” he said.

O’Leary said the impact would be felt in fares for three to five months, but he did not expect any new security procedures even if terrorism was behind the latest air disaster.

He said Ryanair, which only flies to Morocco in North Africa, had conducted its own audits of airport security, alongside European and Irish audits, and revealed that the airline had been concerned about the safety of airports in Egypt where it had been considering opening routes.

“We had certain concerns about some of the airports in North Africa that we don’t fly to but have been in discussions about. There were concerns expressed at the Egyptian airports, but the Egyptians have significantly improved the state of security at their airports,” O’Leary said.


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