Last updated: 06:17 PM ET, Sun September 18 2016

Ryanair Promises Lower Fares to Beat Terrorism Fears (And Its Competitors)

Airlines & Airports | Josh Lew | May 23, 2016

Ryanair Promises Lower Fares to Beat Terrorism Fears (And Its Competitors)

Ryanair has announced record profits and record passenger numbers for 2015 (for the year ending March 31). Because fares will now be dropping, last year’s impressive stats should be easily eclipsed by this year’s numbers. 

Healthy profits and the promise of cheaper fares

Ryanair is definitely a healthy airline. Its 12-month net profits were 1.24 billion euros ($1.4 billion), and it sold 93 percent of its seats in 2015. These numbers were posted despite recurring problems with striking air traffic controllers on the continent and ongoing fears of terrorism.

The profits are good news for fliers because they will allow Ryanair to cut fares. According to CEO Michael O’Leary, that is exactly what the Dublin-based airline is going to do. 

Lower fares are the best weapon against terrorism fears

Ryanair plans to cut fares to combat growing worries about terrorism.  During a recent interview, O'Leary promised lower prices: "When people become a little bit more reluctant, we roll out lower prices and more stimulatory airfares, and people respond by snapping up those cheap prices. We are lowering fares. We'll continue to lower airfares and keep people flying, not just this summer but for the remainder of the year as well."  

READ MORE: Who Will Challenge Ryanair’s Low-Cost Throne in Europe?

Other major LCCs were also successful last year

Ryanair rival Wizz Air was also very successful in 2015, as was easyJet. easyJet announced that it will be lowering fares on a number of routes heading into the summer. This will, it seems, result in a price war that could see fares dropping by as much as 12 percent by the end of the year. 

 O’Leary is confident that his airline will win the pricing contest. In an address posted on the Ryanair web site, he bragged “If there is a fare war in Europe, then Ryanair will be the winner.” 

He also hinted that fares could drop by five percent this summer and by 12 percent during the coming winter vacation season. 

How low can fares go? 

Because of low fuel prices and fuel hedging strategies, the major low cost carriers in Europe should be able to follow through with their “high volume, low profit” strategy. However, the fare war will probably hurt struggling regional airlines and could make life more difficult for low cost wings of major European carriers. 

For fliers in Europe who like cheap prices and don’t mind using low cost carriers, the looming fare war is great news.


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