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O’Leary: Flag carriers will lower fares
Ryanair has reported another rise in passenger numbers as the low cost carrier confirmed it will take delivery of nine new aircraft in 2007 worth £283 million.
The airline carried 3.023 million passengers in September, a 27% increase on September 2004 with load factors remaining at 87%. The number of ticket sales through the Internet increased from 97% to 98%.
Chief executive Michael O’Leary, speaking at an investors day in London, described current trading as in line with expectations but said it ‘remained cautious’ for the winter. He said flag carriers are likely to reduce their underlying fares to remain competitive with low cost carriers.
“We expect yields to benefit from the multiple fuel surcharges imposed by the high fare carriers across Europe,” he said. “However, we anticipate that the fare differential between Ryanair and the flag carriers will be partially eroded as the fuel surcharges are forced to lower their underlying fares to compete with Ryanair.
“We therefore remain cautious but comfortable with our previous guidance for the remainder of this fiscal year. We anticipate strong load factors and passenger volumes but as expected, at slightly lower yields.”
O’Leary revealed it will exercise an option to purchase nine Boeing 737-800s in 2007 – three in September, two in October and four in November. The carrier will also sell five of its older aircraft, which it has operated since 1999.
“This is a continuation of Ryanair’s strategy of operating the youngest fleet in Europe,” said O’Leary.
Report by Steve Jones
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