A summer airfare price war could be looming after Ryanair said it could slash fares by as much as 9% on some routes.
Europe’s biggest low-cost carrier said increased competition was keeping prices down – echoing comments from rivals easyJet and Lufthansa.
The airline said it expected fares to fall by 5% in the six months to the end of September and by 8% in the six months to the end of March 2018.
“We expect the pricing environment to remain very competitive,” chief executive Michael O’Leary said in a statement.
And, Neil Sorahan, the chief financial officer, added: “It’s a competitive market out there. You’re looking at fares down anywhere between 7, 8, maybe as much as 9%.”
Lower fuel costs have seen airlines raise capacity, which has seen lower fares for passengers.
And with schools just beginning the six-week long summer break, many Brits looking for last-minute getaways will be on the hunt for the best bargains.
Ryanair made £11.40 profit from every passenger it carried in the three months to June – up more than £3 a head on the same time a year ago.
Neil Wilson, senior market analyst at City firm ETX Capital, said: “A huge jump in quarterly profits for Ryanair was not enough to assuage investor fears that the company is at the mercy of the pricing pressures felt across the sector. The push for more bums on seats means fares are coming down.”
The possibility of an all-out price war saw the FTSE take a hit, dropping almost 75 points, or 1%, dragged down by British Airways and others in the travel sector.
Ryanair also warned once more on the potential damaging impact of Brexit on the UK travel sector.
“While we continue to campaign for the UK to remain in the EU Open Skies agreement, we caution that should the UK leave, there may not be sufficient time, or goodwill on both sides, to negotiate a timely replacement bilateral which could result in a disruption of flights between the UK and Europe for a period of time from April ’19 onwards,” it said.
“If we do not have certainty about the legal basis for the operation of flights between the UK and the EU by autumn 2018, we may be forced to cancel flights and move some, or all, of our UK based aircraft to Continental Europe from April ’19 onwards.”