RYANAIR CHIEF executive Michael O’Leary has indicated that the airlines’ average fares could rise from the beginning of its next financial year on April 1st after four years of decline as the airline comes to terms with a slowdown in its growth.
Mr O'Leary also confirmed to The Irish Timesthat Ryanair will cut more routes from its schedule out of Dublin this summer and that average fares will rise this year by up to 10 per cent due to increased airport passenger charges here.
“There will be an extensive range of frequency and capacity cuts starting on the 28th of March,” Mr O’Leary confirmed.
The cuts will be announced at a press conference in Dublin this morning.
Last June, Ryanair said it would remove one aircraft from both Dublin and Shannon for its winter schedule, which started in October.
Ryanair had already taken five aircraft out its schedule at Dublin earlier in 2009. It currently operates 16 aircraft from Dublin.
“What will happen this year is that fares out of Dublin will rise with the increased DAA ; they’re going to go up by 40 per cent on 28th of March,” Mr O’Leary added.
This is a reference to the DAA increasing its passenger charge to a maximum €9.32 this year, as allowed by the Commission for Aviation Regulation.
The DAA asserts that the “like-for-like” increase is actually 23 per cent.
The DAA yesterday unveiled new financial incentives to encourage airlines to grow traffic this year.
Traffic through Dublin airport declined by almost 13 per cent to 20.5 million in 2009.
The incentives includes a full rebate on passenger charges if the total number going through Dublin this year exceeds 19.5 million.
“You can safely say that after it the target of 19.5 million will be unachievable,” Mr O’Leary said.
Mr O’Leary said Ryanair would also increase its fares as a result of the rise in airport charges.
“Certainly I’d be surprised if they don’t go up by at least 5 to 10 per cent out of Ireland,” he explained. “They’ll have to go up by that just to pay for the DAA increases. That in turn will result in fewer passengers going through Irish airports.”
Mr O’Leary said its average fare across the airline could rise from April 1st, when its new financial year begins. “We would hope that with fares having fallen by 20 per cent over the past 12 months [that] they would rise over the next 12 months, but I wouldn’t hold my breath,” he said.
