Ryanair cuts ticket prices and offers seats for five pounds

Ryanair-already known to provide travellers with some of the cheapest airfares in Europe-has decided to cut its rates even further, in order to encourage hesitant passengers to purchase tickets, as the airline industry begins to feel the impact of the economic slowdown. Ryanair has, in fact, decided to reduce ticket prices even at the risk of losing £5 on each seat. As part of this maverick and risky strategy, the Irish discount carrier has cut its lowest prices by 50 percent, despite the fact that it will make no profit at all on these seat sales.

Additionally, the carrier has decided to offer up to one million seats for only £5, including all taxes and surcharges. Ryanair is certain to lose money on these seat sales, since the air passenger duty alone stands at £10. Michael O’Leary, the carrier’s chief executive, pointed out that the company’s goal is to ensure that 80 percent of the seats are sold on all flights. If the number of occupied seats is below this threshold, Ryanair will continue to offer reduced prices. Once this proportion of seats fills up, the prices will increase accordingly. Although some analysts are likely to believe that the main motivation behind the current discount is make the business environment even more difficult for Ryanair’s competitors and force some of them to declare bankruptcy, O’Leary maintained that this is not his goal. The chief executive simply wants to increase demand.

www.ryanair.com