Ryanair has said it will slash fares to boost its share of an increasingly competitive European short-haul market.
Ryanair has said it will cut fares sharply to boost its share of an increasingly competitive European short-haul market.
That would be as fuel prices fall, and terrorism concerns mean fewer people travelling.
Europe’s largest low-cost airline also said it is prepared for a fares war – which it believes it will win – to break out later this year.
Chief Executive Michael O’Leary spoke of fares falling by an average of seven percent over the year and dropping by between 10 percent and 12 percent in the winter months.
Asked about the June 23 EU membership referendum in the UK, the Irish carrier also said it would have to deal with the effects of Britain leaving the Europe Union if it happened.
Chief Financial Officer Neil Sorahan explained: “Ryanair, as you’re aware, is actively campaigning for the remain vote. We think Europe and the UK have benefitted from a lot of different things over the years in Europe. In particular low fares like ourselves. If there was to be a leave vote then clearly there would be an awful lot of things that would have to be negotiated over the coming months and years and we would certainly have to cross those bridges if and when we come to them.”
Profits up 43 percent
Ryanair’s annual net profits rose 43 percent to 1.24 four billion euros for the year to the end of March, but it forecasts that will slow to 13 percent for the financial year that ends in March 2017.
Ryanair Full Year profit up 43% to €1,242m. Lower fares, AGB & cost control delivers strong traffic & profit growth https://t.co/VmiDuXRffO
— Ryanair (@Ryanair) 23 May 2016
The fare cuts, which will be focused on the winter season, will heap further pressure on its rivals.
Some of those have already warned about the impact of increasing competition on fares and have reduced some plans for increases in capacity as a result.
Rivals including British Airways and Iberia owner IAG, Lufthansa and Air France-KLM have warned recently about increasing capacity in the sector and the impact on tourism from militant attacks in Paris and Brussels.
EasyJet this month said that strong demand for beach holidays was making up for a drop in travelling since those attacks.