Ryanair Cuts Fares as European Airline Competition Intensifies

by Tammy Levent

Ryanair is planning to undercut its competition by lowering airfares. As powerful and well-funded as Ryanair is, they are expressing caution about hitting their projected earnings targets. This caution may be a reflection of just how difficult things are for the airliner at the moment. Recently, they have experienced drops in both earnings and profits. By cutting fares, Ryanair is hoping to get back on track in the not too distant future. According to CFO Neil Sorahan, any other unforeseen events such as an air traffic control strike or terrorist act could throw the airline off course even further.

Key Takeaways:

  • The fact that an airline as powerful and well-funded as Ryanair is “cautious” about hitting its targets, shows just how difficult things are at the moment. The carrier will be hoping that its aggressive fare cutting reaps rewards further down the line.
  • Ryanair Holdings Plc reported an eight percent drop in third-quarter earnings and said it’s “cautious” about meeting full-year targets as a capacity glut and stuttering economies cause fares to tumble.
  • Profit after tax fell to 95 million euros ($102 million) in the three months ended Dec. 31 from 103 million euros a year earlier, Dublin-based Ryanair said in a statement Monday.

“Europe’s biggest low-cost airline saw prices tumble 17 percent in the quarter as it sought to undercut rivals, and said that trend is set to continue.”


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