Ryanair has vowed to cut airfares by up to 20% this winter in order to combat a fall in passenger numbers as the economic slump continues. Chief executive Michael O'Leary confirmed his belief yesterday that the recession in Europe would last long enough to ensure Europe’s largest low cost airline has to slash its fares to maintain demand.
O’Leary was speaking as Ryanair reported a 47% fall in profits over the last 6 months, and also warned that they would only break even this financial year. “We think fares will be much lower this year. Oil will stay at around $70 a barrel, but average fares will be 15 to 20 per cent less, so we are keeping our break-even target.”
In the summer, the average price of a Ryanair flight was €47, but this could fall further with cheap flights from as little as €47 including taxes. Michael O’Leary declared, “It has never been cheaper to fly than this winter”.
O'Leary also expects another five or six more carriers to go out of business before Christmas, with many others merging to avoid being grounded: “I think this recession will last 18 months and it will be deep, but this provides an opportunity to get rid of crappy airlines and we will also benefit from a drop in oil and plane prices.”
