Ryanair cutbacks reach a limit

Budget airline Ryanair based in Ireland has almost become the biggest airlines in Europe but analysts claim that it cannot continue to make such high revenue without cutting fares to the point of making no profit. One expert talked about how the Irish airline cannot cut back any further and that it had to remember that they will always need two pilots and a certain amount of staff to take care of passengers and there was little left for the airline to cut back on. However Ryanair claim that they can still see opportunity for expansion and improvements.

Shares in the company dropped by four per cent recently as the airline failed to deliver on raising its full year outlook. The first half profit of an 80 per cent rise was largely owed to cheaper fuel. Ryanair has used the services of Boeing for years but the relationship between the two aviation experts looks set to diminish as an order for 200 new aircrafts for 2013-16 has been moving at a very slow pace.

Michael O’Leary, the chief executive for Ryanair, spoke about how Boeing was not helping the airline to be cost effective. O’Leary is famous for his bargaining skills in the industry after ordering 100 new aircraft from Boeing in the wake of the September 11th terrorist attacks that rocked the city of New York. With such a hard business man in place at the helm, it is unlikely that Ryanair will back down and pay the prices that Boeing are demanding for the new order and their business relationship may soon come to an end.