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Old May 9th, 2007, 04:36 PM posted to rec.travel.europe,rec.travel.air
Chiken Koma
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Default Ryanair launches airline price war

http://uk.biz.yahoo.com/09052007/325...price-war.html

Ryanair launches airline price war

Travellers board a passenger jet belonging to Irish discount airline
Ryanair
Click to enlarge photo

LONDON (Reuters) - Irish low-cost airline Ryanair (Dublin: RY4.IR -
news) said on Wednesday it was launching a price war against other
European airlines, giving away 10 million seats virtually free in its
biggest ever promotion.

The 5-week promotion came after four days of weakening shares in the
sector and as its closest rival, easyJet, said passenger numbers were
being hit by higher taxes, rising interest rates and environmental
concerns.
"I'd expect this to put further downward pressure on prices, put
further pressure on Ryanair's yields, and on everyone else's yields,
not just in the UK, but all across Europe," Chief Executive Michael
O'Leary told reporters. "We're launching a price war in Europe."

Ryanair normally offers a fraction of its seats at discount prices,
but Wednesday's promotion represents close to half its capacity.

"The rest of the competition are suffering," O'Leary added. "Their
load factors are down, and their yields are down. Let's go in and kick
them all while we can."

EasyJet (LSE: EZJ.L - news) 's shares, which were already 2.5 percent
below their opening price, fell a further 3.5 percent by 2:57 p.m.
(British Time) to 594 pence.

The airline had already promised to cut prices to lure in more
passengers.

EasyJet's shares have lost 19 percent since both Ryanair and British
Airways (LSE: BAY.L - news) noted a weakening in April trading last
Thursday. British Airways shares were down 1.4 percent by 2:57 p.m.,
in its fourth day of losses, while Ryanair shares were down 0.7
percent.

Ryanair's 10 million seats to European short haul destinations will be
at 10 pounds, 15 pounds and 20 pounds, including air passenger duty.

"That is virtually free," O'Leary told Reuters on the sidelines of a
news conference. "All you'll be paying is Gordon Brown's taxes," he
added, referring to the new air passenger duty since February.

Ryanair also announced that if passengers found a cheaper fare from a
rival airline on the same route, it would pay double the difference

"We've budgeted over a 5 week period we would pay out about 1 million
pounds sterling in double the difference payments," said O'Leary.
"That's based on 20,000 claims at an average of 50 quid. There won't
be many calls. But we honestly have no idea."