Monday 3 November 2008

Price cuts to improve trading?

Budget airline Ryanair is preparing to launch transatlantic flights for just £8 by buying cheap planes from struggling rivals.The plan will be revealed as chief executive Michael O'Leary announces the company's half year results.

"Economy class will be very cheap - around 10 euros. But our business class will be very expensive. There's always 10-15% who'll pay whatever it costs for a wide seat," he said. The £8 flights - which could begin by the end of next year - would be available for those booking early. Passengers would pay airport taxes on top of the fares.

Ryanair's half-year profits have fallen by 47%, according to figures out this morning.

Ryanair

The budget airline says it will make a loss over the next six months after forecasting a drop in average fares of between 15% and 20%. Falling oil prices and its desire to keep its planes flying with fewer empty seats will drive fares lower.

Ryanair reported half-year profits fell to £170.4m in the six months to September 30, a period when fuel costs soared 101%.

So, a touch of Irish Keynes then? King Cyclops can study this.

No comments:

Post a Comment