Ryanair takes aim at price comparison websites

Ryanair Boeing 737

Ryanair is seeking to crush flight price comparison websites such as Expedia and Opodo, claiming they “make no sense” and “shouldn’t exist”.

The airline’s controversial boss, Michael O’Leary, has written to four other leading airlines in Europe asking them to display each other’s fares on their website, to circumvent the price comparison sites.

He did not name the airlines, but they are understood to be IAG (British Airways/Iberia), Air France/KLM, Lufthansa and Easyjet.

“I think it is something the big airlines could and should work together on because I think it makes no sense for third-party price comparison websites out there,” O’Leary said in a video statement.

“If the airlines were competitive and had a competent digital offering those kind of websites shouldn’t exist.” None of the airlines has responded to O’Leary’s suggestion.

The statement came as Ryanair posted a 25% rise in quarterly profits, with rising passenger numbers attributed to its new approach to customer service.

The number of customers jumped from 24.3 million to 28 million in the three months to June 30, 2015 while profits surged from €197m to €245m.

Average fares fell to just €45 (£32) as Ryanair used lower fuel prices to cut prices, while fewer customers paid to put their bags in the hold (or what it called ‘lower checked-bag penetration’).

The airline predicted that airfares will fall by 4-8% in the second half of 2015, as cheap fuel sparks a price war among European airlines.

Ryanair has paid an average of $91 a barrel for forward-bought fuel for 2016, but has managed to cut that to $66 for 2017, saving it €250m.

Next year it expects to carry a record 103 million passengers. In June, Ryanair carried 9.5 million customers, up 14% on a year earlier. By comparison, the combined British Airways/Iberia operation carried 7.8 million passengers in June.

In typically combative mode, O’Leary predicted that the airline will continue to grow strongly in Copenhagen – despite a bruising battle with unions in Denmark.

“Two weeks ago we decided, in the best interests of our customers and people, to close our two Danish bases in Copenhagen and Billund. This followed threats by the Danish Unions who admitted that they had no members among our Copenhagen pilots or cabin crew to get their members (competitor airline employees) to blockade/disrupt our flights.

“By moving the aircraft from Copenhagen and Billund to airports outside Denmark the unions have no legal basis for imposing these threatened disruptions, which allows us to continue to grow strongly in Copenhagen without union interference.”

He added that the airline continues to be “inundated” with invitations from airports around Europe to become Ryanair destinations.

Ryanair’s expansion in 2016 will be focused on Germany, where it opens its sixth base in Berlin in September. From November Israel will become the thirty-first country to be served by Ryanair, although flights will be to the beach resort of Eilat, not Tel Aviv.

Earlier this month, Ryanair accepted an offer from International Airlines Group (IAG) for its 29.8% stake in Aer Lingus.

But it denounced the “baseless” divestment forced on it by UK regulators.

“We will continue to oppose the UK CMA’s baseless 2013 divestment ruling, (and their recent rejection of Ryanair’s request to review that decision), which was based on the invented theory that no other airline would bid for Aer Lingus while Ryanair was a minority shareholder. This has been hopelessly exposed by IAG’s current offer for Aer Lingus, even while Ryanair was its largest single shareholder.”

Powered by Guardian.co.ukThis article was written by Patrick Collinson, for theguardian.com on Monday 27th July 2015 13.59 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010


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