19 September 2008

Ryanair slashes winter fares in face of recession fears

Ryanair will respond to plummeting consumer confidence by slashing fares this winter.

Europeââ¬â¢s largest no-frills carrier has initially released five million seats for â'š~¬5 one way for travel in October and the first two weeks of November.

It also warned of further airline failures following XL Airways, Futura and Zoom.

ââ¬ÅâœRyanair believes that many unviable loss making European airlines will cease trading this winter because of unsustainable losses and insufficient cash reserves,ââ¬~ a statement issued to coincide with its AGM said.

CEO Michael Oââ¬â¢Leary said: ââ¬ÅâœWe believe there will be further airline bankruptcies in Europe over the coming weeks, as more of Europeââ¬â¢s non-viable, loss making airlines run out of cash or their credit facilities are withdrawn.ââ¬~

He added: ââ¬ÅâœThe extraordinary pace of European airline consolidation will also continue. 

ââ¬ÅâœThere is no doubt that most of Europeââ¬â¢s flag carrier airlines will merge into three large high fare groupings led by BA, Air France and Lufthansa this winter.

ââ¬ÅâœWe expect that the European Commission will rubber-stamp approval of these mergers, which will help Ryanairââ¬â¢s appeal against the EUââ¬â¢s prohibition of our 2006 much smaller merger with Aer Lingus.ââ¬~ 

He said the airline would continue to fight against screen-scraping websites despite the European Commission rejecting complaints by Ryanair.

ââ¬ÅâœRyanair is continuing to secure injunctions in Ireland, the UK, Spain and Germany against these mis-selling ticket-touts and cancel screen-scraper bookings which have been made in breach of Ryanairââ¬â¢s terms and conditions,ââ¬~ added Oââ¬â¢Leary.

He welcomed recent falls in the price of oil but said this would not have much impact on the carrierââ¬â¢s full year results ââ¬Åâœbecause we have already hedged Q.3 at $124 per barrel and any Q.4 fuel savings may be absorbed by lower fares and yields as we stimulate growth in a recession this winterââ¬~. 

Ryanair expects to carry more than 58 million passengers in the year ending March 31, 2009 and expects to break even.

ââ¬ÅâœWhilst Ryanair expects to pay less for oil in Q.4, these savings may well be eaten up by lower yields this winter, as the UK, Irish and European economies go into recession and consumer confidence plummets,ââ¬~ the airline said.

by Phil Davies 

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• hidden charges
  
  

  Ryanair do provide cheap seats but will charge say &#pound;8 check in fees and also &#pound;8 if you pay by debit/credit card but strangely not if you use Visa Electron. You may get a &#pound;1 fair but the taxes will be higher than if your fare was higher. Also the cheapest option is genuinely the occasional no tax fare which can sometimes be found like my &#pound;2  return from London to Dublin using hand baggage and own check in facilities. Bargains are there but often hard to find - just keep looking at alternate dates.

  By william turner, Monday, September 22, 2008
• What makes you think he is running an airline?
  
  

  This is not an airline - everyone has been hoodwinked! It is the last of the great dot.com businesses. All this bluster about screen-scrapers etc overcharging the poor public is because these are the firms hurting the REAL core business - visit the website and you will see credit card offers, car/home/life insurance, cheap electricity/gas, more games than a Vegas casino... Carrying people from A to B is just his way of gaining a captive audience before and during transit - the bar service makes more than the ticket price! Give it a couple of years and there will probably be a non-stoppable video shopping catalogue at eye level on the head rest in front of you and a credit card swipe on the toilet door.

  By Mike Stones, Friday, September 19, 2008
• Oh Ryanair...
  
  

  ...this isn't news. They've been tryin g to flog seats from &#pound;1 - &#pound;5 since June this year, and failing, it would appear.

  By W Shearer, Friday, September 19, 2008
• Do we really care?
  
  

  Do we really care about Michael O'Leary's opinion of the European airline industry and the global oil price. After all this is the guy who called the oil price lower and so didn't hedge. Michael took a bit of a bath on that one. Now he has hedged at $124 and so is going to lose out on way down as well. Good call! Just because it is big does not make Ryanair invulnerable. I hate this crowing and wish he would shut up and simply get on with running his airline.

  By Michael Broom Smith, Friday, September 19, 2008