Ryanair go for the competition's jugular by driving down budget fares
Cock-a-hoop Ryanair boss Michael O’Leary wants to follow up on his company’s increasing financial muscle by delivering a knock out blow to his competitors in a fares war this winter.
The Irish carrier – fresh from posting a 37% profit increase for the first half of 2015 – is seeking to put pressure on its rivals by forcing them to drop their rates or lose market share.
After enjoying a bumper summer when it became the first EU airline to carry ten million passengers in a month, the CEO joked to CNBC’s Squawkboc that everything was “so good it’s worrying”.
The Irish Independent reported O’Leary predicting that because of his company’s expansions across Europe, air prices would be kept low to ensure they keep “widening the gap” between Ryanair and other carriers.
Mark Simpson, Goodbody equity analyst, claimed the Irish airline’s results were the best of the season. He said that Ryanair was now driving the price environment and it was up to its competitors to respond to their move. Stephen Furlong, Davy analyst, agreed that the carrier had produced an "an exceptional performance.”
The Ryanair chief disclosed that his company had hedged 95% of its fuel requirements for the next year – and that would add up to €430m alone in savings.