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Ryanair to Slash FaresAugust 7, 2008 By: Kirk Cassels
Ryanair, Europe's largest low-budget carrier, announced it will cut its cheapest air fares in half in order to offset shrinking demand, UK newspaper The Guardian reports. The announcement comes after the airline announced it would reduce flights due to soaring fuel prices.
The move will reduce prices for the airline's T fares, which represent about half of the seats sold per flight. Consequently, 1 million seats will be sold for the price of £5 next month (about $9.72) including charges and taxes.
"If passengers are booking ahead of the 80 percent seat target, we will close off the cheap seats," said Michael O'Leary, CEO of Ryanair. "If we are booking behind it, we will open up more cheap fares." O'Leary admitted that Ryanair flights break even when the planes are 80 percent full and that the airline was having to drop prices in order to fill its planes. He added that the main reason for the price cut was to increase the lagging demand and not to drive any rivals out of business.
O'Leary also confirmed plans to launch an experimental ban on checked-bags, creating carry-on only flights, on Dublin to Cork, London to Glasgow, Rome to Milan Bergamo and Frankfurt Hahn to Berlin routes.