Ryanair slashes winter fares in face of recession fears
Ryanair will respond to plummeting consumer confidence by slashing fares this winter.
Europe’s largest no-frills carrier has initially released five million seats for €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.
“Ryanair believes that many unviable loss making European airlines will cease trading this winter because of unsustainable losses and insufficient cash reserves,†a statement issued to coincide with its AGM said.
CEO Michael O’Leary said: “We believe there will be further airline bankruptcies in Europe over the coming weeks, as more of Europe’s non-viable, loss making airlines run out of cash or their credit facilities are withdrawn.â€
He added: “The extraordinary pace of European airline consolidation will also continue.
“There is no doubt that most of Europe’s flag carrier airlines will merge into three large high fare groupings led by BA, Air France and Lufthansa this winter.
“We expect that the European Commission will rubber-stamp approval of these mergers, which will help Ryanair’s appeal against the EU’s prohibition of our 2006 much smaller merger with Aer Lingus.â€
He said the airline would continue to fight against screen-scraping websites despite the European Commission rejecting complaints by Ryanair.
“Ryanair 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 Ryanair’s terms and conditions,†added O’Leary.
He welcomed recent falls in the price of oil but said this would not have much impact on the carrier’s full year results “because 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 winterâ€.
Ryanair expects to carry more than 58 million passengers in the year ending March 31, 2009 and expects to break even.
“Whilst 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,†the airline said.
by Phil Davies
Phil Davies
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