Holidaymakers to benefit from low-airfare bonanza as Ryanair battles rivals
Published 24/05/2016 | 02:30
Summer holidaymakers and winter skiers are set for a cheap air fares bonanza this year, according to Ryanair chief executive Michael O'Leary.
The airline boss said yesterday that the airline's average fare was likely to fall by about 7pc by the end of September, and by between 10pc and 12pc over the winter and into early spring next year.
Lower fuel costs, more intense competition in Europe's skies and more available capacity are providing the perfect planetary alignment for consumers, who will be the beneficiaries of the airline dogfight.
Terror attacks in Paris and Brussels have also forced airlines to keep prices low to entice flyers.
But sun-seekers might still have to cough up bigger fares for destinations such as Portugal and Spain.
Speaking to the Irish Independent, Ryanair chief marketing officer Kenny Jacobs said that the most intense competition out of Dublin at the moment, for instance, was to destinations in Italy, Germany and Belgium.
He said more German consumers had opted to fly to Portugal and Spain this summer instead of Turkey, where there have been a number of terrorist attacks in recent months.
He said the fare war was still bubbling away on specific markets, but insisted Ryanair would face any challenge from rivals.
"We'll start it, and we'll finish it," he said. Ryanair's average fare fell 1pc to €46.67 in its last financial year.
Mr O'Leary was speaking yesterday as Ryanair reported another set of record results. Its profit in the 12 months to the end of March soared 43pc to €1.24bn, while revenue rose 16pc to €6.53bn. It expects to make a €1.4bn profit in the current financial year.
The airline carried 106 million passengers in its last financial year, which was 18pc more than in the previous 12 months.
Ryanair's bookings for the summer season are 2pc ahead of what they were last year, but at "lower pricing than last year", according to Mr O'Leary.
However, he claimed that Ryanair had been luring those extra passengers at the expense of rivals.
Interviewed on business news channel Bloomberg yesterday, Mr O'Leary joked that he became emotional when an assistant at the station told him how cheap her ticket to Malaga with Ryanair was.
"I got very upset. In fact, I started to cry as she explained what a great deal she got," he said.
And he insisted that despite competitors now squaring up to Ryanair with cheaper fares as they benefit from low fuel prices, the Dublin-based carrier would emerge on top.
"If there is a fare war in Europe, Ryanair will be the winner," he said.
"Lower fares will overhang the company's performance over the next 12 months," he conceded, adding that fares would remain subdued in the current quarter of its financial year, and also in the second quarter.
Mr O'Leary said the airline's fuel bill this financial year would be about €200m lower than last year, and he expected almost all of that saving to be passed on to customers.
Ryanair has been expanding rapidly. It now has 84 bases and in the past year has announced new bases at cities such as Prague, Bucharest, Vilnius and Sofia.