Ryanair recorded a tax loss of €35 million for the last three months of 2013.
The same period in 2012 saw the airline raking in a post-tax profit of €18 million.
Most airlines incur losses over the winter months, but for the last three years Ryanair has profited during the season.
This last year, Ryanair felt obliged to cut its fares in order to attract flyers. Overall ticket prices dropped 9%, pumping up passenger numbers by 6% to 18.3 million. Despite increases in food and drink prices onboard, revenue dropped.
Analysts believe that despite its losses, a price war will be sparked as Ryanair seeks to entice an additional 30 million passengers a year to reach a total of 110 million.
Ryanair already has the lowest cost base in the industry in Europe, and has been able to shave its cost base further. Additionally it expects to save €80 million on fuel next year. These savings will likely be poured into suppressing fare prices.
To attract bargain hunters, it has begun to open up its lowest fares up to nine months in advance. Previously those lowest fares could be found three or four months in advance.
Fully allocated seating on all flights came into effect at the beginning of February. Michael O’Leary himself admitted that easyJet, which introduced allocated seating in November 2012, “wiped the floor” with Ryanair by providing good service, not just the lowest fares.
Later this year more flexible business fares and boarding passes for smart phones will be introduced.
Ryanair’s strategy of late has shifted from its original business model of using outpost airports to primary ones, such as Lisbon and Rome, where it can entice passengers away from traditional airlines such as TAP and Alitalia. The company said it would be prepared to look at more major European hubs, with the exceptions of Heathrow, Frankfurt, Paris Charles de Gaulle and Orly.
O’Leary, who has been chief executive since 1994, is to reduce his colourful media appearances, which he called “Pony and Trap” shows, as the airline tries to gain a user-friendly reputation.
