Published on : Wednesday, July 26, 2017
Ryanair, a most popular Irish airline carrier, with its primary base in Dublin, says that it could cut the fares as much as 9% on the same routes, as the competition has intensified in the next few months in the airline industry.
The competition in the airline industry was growing as airlines switched the capacity from Turkey and North Africa. Separately, the officials of the Ryanair said it had made a non-binding offer for Alitalia.
On last Friday, this airline company has made10 offers, which is making the huge losses. It is reported that there is a 55% rise in pre-tax profits to 397m euros (£356m) in the three months to 30 June. The revenues of Ryanair were up 13% to 1.68bn euros.
The average fare of Ryanair during the quarter rose up to 1% to 40.3 euros. This was a jinx due to the much stronger trading of Easter. Easter is a peak-time for holidaymakers; fell in April this year, inside the carrier’s reporting period.
Ryanair said that it expected the fares to fall by 5% in the six months to the end of September and by 8% in the six months to the end of March 2018.
The management of Ryanair is expecting the pricing environment to remain very competitive.
EasyJet and Wizz Air have both said that fares will be under pressure this summer. With that there is a fall of around 3.5% in the share price of Ryanair. Other competitive airlines like EasyJet and British Airways saw the fall in share price by 3.4% and 2.7% respectively.
In a bid to recover the lost revenues in the recent share market degradation, Ryanair is allowing for limiting the number of passengers, who are eligible to take a second free carry-on bag. Mr O’Leary told that the analysts that it was possible that only passengers who paid for priority boarding would be eligible. However, he added that no decision had been made.
The senior executives Ryanair also repeated the warnings of major flight disruptions between the UK and Europe if Brexit talks fail to agree a bi-lateral deal on flights.
The airline has warned it may cancel flights and move operations abroad if there is no agreement well in advance of Brexit.
EasyJet, another competitive flight industry, announced last week, that it had secured an air operator’s certificate in Austria to enable it to keep flying across the European Union following Brexit.