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Fare war looms as Ryanair cuts prices

Monday, May 23, 2016 - 01:36

Ryanair, Europe's largest low-cost airline, is prepared for a fare war to break out later this year. As Hayley Platt reports, it's cutting its own fares sharply to increase its market share to sustain profits.

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A price war is looming among Europe's budget airlines. And Ryanair intends to win it. The low cost carrier - already Europe's largest by passenger numbers - plans to cut fares by an average of seven per cent - with some winter fares down by 12 per cent. The Irish carrier aims to make up the loss by boosting passenger numbers. (SOUNDBITE) (English) RYANAIR CFO, NEIL SORAHAN, SAYING: "Ryanair's always had a policy of what we call 'load active yield pass' which means we absolutely hit the passenger number and the fares follow." Net profit for the year increased by 43 percent to almost one and quarter billion euros. But the group expects that to drop back at least 13 percent later in the year. (SOUNDBITE) (English) CMC MARKETS, MARKET ANALYST, JASPER LAWLER, SAYING: "The low fuel prices seem like they're actually encouraging Ryanair's competition to undercut on prices and so that's causing some difficulty for Ryanair and actually their results were slightly less than expected." Security concerns following the recent attacks in Brussels and Paris are also weighing on Ryanair's business. So is Britain's vote on EU membership. (SOUNDBITE) (English) RYANAIR CFO, NEIL SORAHAN, SAYING: "If there was to be a leave vote clearly there would be an awful lot of things that would have to be negotiated over the coming months and years and we would certainly have to cross those bridges if and when we come to them." Ryanair's CEO Michael O'Leary has been campaigning hard to keep Britain in the EU. But his offer of discounted tickets to ex-pats wishing to fly home and vote has apparently upset the Leave campaign - they've reportedly made a complaint to the police calling the promotion a bribe.

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Fare war looms as Ryanair cuts prices

Monday, May 23, 2016 - 01:36