Air fare war looms as Ryanair target rivals with aggressive winter price cuts

Ryanair today opened an air fare price-cutting war this winter, heaping pressure on its struggling rivals with an all-out drive to win millions more customers. The Irish budget airline, which already carries more passengers than any other European operator, is planning “very aggressive pricing”, promising that average fares will fall by up to 8% in the six months to March 2016. The move comes days after higher-cost rival Air France-KLM said it would accelerate restructuring plans and Germany’s Lufthansa announced new low-cost style fares on Monday in signs they are feeling the pressure. Winter price cuts could also prove bad news for easyJet, which Ryanair is targeting in a major push by improving customer service and expanding into mainstream airports.

I think this winter they will push capacity aggressively into certain markets … and if there is an airline that should be concerned, it’s probably easyJet

Analyst Mark Simpson

The price cuts were announced as Ryanair unveiled a 25% jump in profits for the three months to June. Profits after tax for the full year would be at the higher end of its forecast of €940m to €970m given in May. “We’re going to use some of the slightly better (first-half) performance … to pass on very aggressive pricing so that we fill 15% capacity growth in the second half,” chief executive Michael O'Leary said. However, he also revealed he had contacted his rivals to ask them to display each other’s prices on their websites to cut out third party price comparison sites. “If the airlines were competitive and had a competent digital offering. Those kind of websites shouldn’t exist,” Mr O'Leary added.

Our mix of low fares, best on time performance and enhanced customer experience under our Always Getting Better programme continues to attract millions of new customers.

Ryanair boss Michael O'Leary