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Ryanair increases competition on easyJet routes

It is expected that Ryanair’s chief executive, Michael O’Leary, will announce the launch of twice-daily service to Alicante and once-daily service to Barcelona-Girona, as he steps up the pressure on the budget carrier’s main rival, easyJet.

Other than three routes it operates to from Gatwick to airports in Ireland, these will be Ryanair’s first two routes from the London airport, where easyJet has based 35 of its planes.

O’Leary, has held a press conference in London to compete with the announcement of easyJet’s full-year results, is expected to position the new services as raising the competition between the rivals, at a time with the easyJet board is embroiled in a row over strategy for the budget carrier.

The founder of easyJet, Sir Stelios Haji-Ioannou, has indicated that he wants to slow the airline’s growth and to see dividends from 2011. He also speaks for 26.9 per cent of the shares in the carrier, and is threatening to remove Sir Colin Chandler as chairman, taking on the position himself, unless the board agrees with his demand of appointing two new non-executive director positions.

The dispute is raising concerns among City analysts. A Numis analyst, Wyn Ellis, downgraded his price target for the company’s shares yesterday, from 273p to 227p.

“The main beneficiary of Sir Stelios’ proposed strategy, in our view, would be Ryanair,” Ellis said.

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