Ryanair plans transatlantic price war: media

Published: 24 Sep 2008

Ryanair is reportedly preparing to trigger a transatlantic fares war as it seeks to cash in on the crisis engulfing the aviation industry.

Low cost flights could be run from Stansted, Prestwick and Birmingham to New York under the airline's plans. They would be operated by a new company, which Ryanair would set up purely to take on the established airlines on the route.

In another significant development, pertaining to changes in the aviation industry, Ryanair predicted that only five carriers will survive in Europe.

Airline's deputy chief executive Howard Millar said that only five European airlines are fit enough to survive the ongoing turmoil in aviation.

Millar named easyJet and Ryanair as the two low cost carriers that would survive, and a spokesman for the airline confirmed that British Airways, Lufthansa and Air France/KLM were the remaining three.

"Smaller carriers will not survive as Europe moves towards recession," Millar said.

Ryanair remains unhedged for its fuel needs beyond the end of this year and believes oil prices will resume their recent downward path after a record one-day rise.

"We're not hedged beyond December 31 this year, but oil prices will probably continue to weaken, particularly as the United States (economy) seems to be continuing to weaken," said Millar.

The airline last week tweaked its guidance, saying it would break even this year if oil stayed at $100 a barrel and would return to "substantial profitability" in 2009.

Comments

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Jim said on 26 Sep 08:

What a harsh prediction. It is difficult to believe that only Ryanair and easyJet will be the survivors among all the low cost airlines. It seems that market forces would favor at least one low cost carrier on the continent.

I like the idea of Ryanair flying to New York, and I would likely be a customer. But, Stansted is my least favorite of London airports. For early morning flights, there is no bus service, taxis are hard to find and and are expensive. So, if your flight leaves at 6AM from Stansted, the best of the bad solutions is arrive about midnight and spend the night trying to sleep sitting up.

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