Ryanair to increase fares from April 1
Ryanair has said it’s planning the first fare increases in four years in order to sustain earnings growth as route expansion slows.
The region’s largest discount carrier will probably lift ticket prices in the fiscal year beginning April 1 and also aims to deepen cut costs, Chief Financial Officer Howard Millar said today in an interview in Dublin, where Ryanair is based.
Talks with Boeing Co. on the purchase of 200 short-haul airliners broke off last month, when Chief Executive Officer Michael O’Leary said he’d “significantly” reduce growth and capital spending to return cash to investors. Fares will drop 20pc in the 12 months ending March 31, Millar said today.
“We’re in the midst of recession and we expect to slow down our growth,” the finance chief said in the interview.
“We’ve had a lot of discounting of fares as we’ve grown the business. We expect to increase profits by the combination of reducing costs and we think average fares will probably rise.”
Ryanair last increased ticket prices in fiscal 2007, when they jumped 7pc. Fares declined 1pc in fiscal 2008 and 8pc in fiscal 2009.
While the Dublin-based carrier will still add 112 Boeing 737s in the next three years, expanding its fleet by more than 50pc, Millar said today that “the door is closed” to a further order with the US company following the recent failure to agree a purchase price.
The existing backlog still amounts to an “aggressive growth plan,” he said. Ryanair carried 65 million passengers in 2009, a 13pc increase, and serves 150 airports with more than 1,000 routes.
“We’ve had steady growth that proves low fares airlines can continue to grow even in difficult periods,” Millar said.
Ryanair would consider any offers for its stake in Aer Lingus, although it doesn’t expect any bids, said the executive, who spoke after addressing the 2010 European Airfinance Conference in Dublin.