Ryanair is happy to sell plane tickets at a loss in order to get people on its planes during off-peak spells, the chief executive has said, as he shared that low-cost flights will continue to be on offer – though not as inexpensive as they once were.
Michael O’Leary was speaking to The Independent after research showed a wide range of flights selling for less than the £13 air passenger duty his airline must pay when a customer steps on board a Ryanair plane from the UK.
The same applies to flights from the Essex-based airport to Catania in Sicily, all week from Thursday 18 January to Wednesday 24 January. The one-way journey is 1,230 miles, and for a £12.99 fare, that is less than the Stansted Express train from London to the airport – even with a railcard.
A search by The Independent found the same £12.99 deal for flights departing from British airports on Wednesday 24 January, such as Bristol to Sofia in Bulgaria – a three-hour journey covering almost 1,400 miles. Other journeys available at the same fare on the same day include Belfast International to Porto and Stansted to Prague or Baden-Baden.
“There will always be periods of time, particularly at this time of the year – January, February before you get to the school mid-term break or the Easter holidays or summer – where we’re trying to fill flights,” Mr O’Leary said.
“We’re happy to fill flights at loss-making air fares. So there will still be lots of low air fares.”
The airline tells investors it has a is has a “yield passive strategy whereby seats are priced to ensure that high load factor targets are achieved”.
In 2022, Mr O’Leary said the days of €9.99 flights were over – a view he reiterated to The Independent for 2024.
“We’re now paying $80 (£63) a barrel for fuel. I don’t think you’ll see a return to £9.99 air fares but £15, £20, £25 is still a phenomenally cheap air fare – when you go back to the pre-deregulation days of the 1980s or the early 1990s when airfares were regularly £200 or £300.”
Anna Hughes, director of Flight Free UK, said: “Ryanair offering flights at a loss shows just how upside down our transport system is.
“Even considering air passenger duty, there’s still no tax on aviation fuel, meaning that Mr O’Leary can afford to offer dirt-cheap fares even if in the short term it means making a loss. At the same time, rail fares keep rising every year.
“It’s time to make aviation pay for the environmental damage it causes by taxing airline fuel.”
The £12.99 Ryanair flights allow only one small backpack to be carried on board, with a random seat assignment. Anything else – from bigger cabin or checked baggage to speedy boarding – is extra.
The aviation analyst Sean Moulton said: “Ryanair are looking to gain market share and airport dominance through low fares by generating more passengers and thus lower costs at major airports.
“Ryanair also make the bulk of its profit through ancillary services such as check-in bags, seat selection and onboard sales which offset their low fares and ensure they remain profitable.”
Ryanair has forecast full-year profits of around €2bn (£1.72bn).
Mr O’Leary predicted the summer of 2024 would experience less flight disruption than last year, though air traffic control issues remain a concern.
”I think the French air traffic control strikes will continue. Europe has failed to take any action to protect overflights which would solve 90 per cent of these issues. And I worry about UK Nats. I think there will continue to be systems failures and there will continue to be short-staffing.
“Other than that though, I think this will be a better summer. Capacity will still be constrained in Europe. So I’m hopeful that the experience at the airports – except where there is a Nats failure or a French ATC strike – will be better this year than it was last summer.”