Ryanair has said that it will cut fares this year in order to fly its aircraft at full capacity.
The announcement raised the prospect of a price war among Europe’s airlines, which Ryanair boss Michael O’Leary said confidently that his airline would win.
“If there is a fare war in Europe, then Ryanair will be the winner,” O’Leary said in a video on the airline’s website.
Ryanair prices will go down by an average of 7% in its current financial year (to the end of March 2017), according to Mr O’Leary. He said he expected summer time fares to decrease by 5% to 7% while winter fares could shrink by as much as 12%.
Ryanair’s strategy is to sell as many seats as possible, if necessary by cutting fares, he said.
“We will take whatever price we get as long as we fill our airplanes. I think it [business] will be strong in terms of traffic but weak in terms of pricing,” he told Bloomberg TV.
The company seems to be doing well on it. Net profits were reported to have grown by 43% to €1.24 billion for the year which ended March this year.
Earlier in May, easyJet announced it had cut prices in order to attract passengers.
O’Leary reiterated his support for the UK to stay in the EU. Although the EU has many things which he dislikes, the single market has been good for customers, he said.
The company had aired an ad which offered lower fares to UK expats to fly to the UK to vote to stay. The Vote Leave campaign complained that it was against the Bribery Act because it offerd discounts in exchange for votes. Police are investigating.
“Now they believe that Ryanair offering lower fares to UK customers is somehow endangering democracy in the UK,” O’Leary said.
