'Mother and father' of airfare wars on the radar says Ryanair chief Michael O'Leary
Published 26/08/2015 | 02:30
Ryanair chief executive Michael O'Leary has predicted the "mother and father" of all fare wars this winter as airlines prepare pitched battles to control Europe's skies.
Ryanair and Aer Lingus are already squaring up for a showdown at Dublin as British Airways owner IAG takes full control of the former flag carrier.
Other airlines in Europe - spurred by low fuel prices and increased demand as economies improve - are also expected to join the pan-continental fray.
"There is rumoured to be a fare war coming this winter and I can confirm that all those rumours are absolutely correct," said Mr O'Leary in London as the carrier launched its new Ryanair Car Hire service, a new partnership with Cartrawler.
The Irish technology firm, which was sold outright last year by its founders and a private equity firm for €450m, will help Ryanair offer its flyers a direct connection to 1,500 car rental agents in over 30,000 locations in 174 different countries.
Ryanair Car Hire will go live on the Ryanair website from September 1.
Mr O'Leary said the summer period was strong for Ryanair and pointed out that its load factors have been at record levels.
He said Ryanair will benefit as existing fuel hedges expire in coming months. Those fuel hedges were inked at nearly twice the current price of a barrel of oil.
Some smaller Ryanair rivals either didn't hedge and already benefit from much lower fuel costs, or didn't hedge at those higher prices.
"We're looking forward to enjoying much lower fuel prices and intend to pass that on both this winter and next summer in the form of much lower airfares," he said.
Ryanair is expected to base more aircraft at Dublin this winter as it steps up its battle with Aer Lingus from the capital. Ryanair is targeting more primary airports for growth, and boosting frequencies to appeal to business travellers.
Global car rental giant Hertz terminated its long-standing agreement with Ryanair last month. The company claimed that Ryanair had breached the terms of their contract by making its airline tickets available for sale through third party global distribution systems.
Ryanair disputes that claim.
The airline also yesterday confirmed the appointment of former chief financial officer Howard Millar, and ex-British Airways pilot John Leahy, as non-executive directors.