Wednesday, June 04, 2008

Ryanair chief says fares may rise by 5%


Everyone just wants a bigger piece of the pie although Ryanair seems content, for now, with what they have.
BUDGET airline Ryanair warned yesterday that its fares may have to rise 5% this year as costs increase.

Ryanair chief executive Michael O’Leary added that the airline would be grounding up to 20 aircraft this winter and said some airlines would “go bust” if oil stays at $130 (£65) a barrel.

But he said Ryanair would never introduce fuel surcharges even if oil reached $500 a barrel and that it was nonsense to say the era of low-fare air travel in Europe was over.

...

Mr O’Leary was speaking in London as Ryanair unveiled its 2007-08 pre-tax profits which rose 17% to 528m (around £419m). He said Ryanair would break even if oil prices remained at $130 but if it rose to, say, $140 or $150 then Ryanair would lose money.

He said that fuel surcharges introduced by carriers such as British Airways were “completely unjustified” and were “just a scam” to take more money from the travelling public.

Mr O’Leary said that Ryanair would probably ground around 12 to 15 aircraft at Stansted Airport and around five to seven aircraft at Dublin during December, January and February next winter.

He said that this would not mean cuts in routes but would merely mean a reduction in frequency to some destinations.

He said the present oil price level was unsustainable and might even go up before coming down. There was likely to be a major recession and this would mean demand for oil would fall.

Describing the huge hike in prices of late, Mr O’Leary said it was “irrational”.

Note: Headline links to source.

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