RYANAIR announced yesterday the introduction of a £50 return fare from Dublin to Paris and Brussels. Ryanair begins service to the two cities in two weeks' time. It is also to introduce a scheduled service between Dublin and Stockholm.
Ryanair's chief executive, Mr Michael O'Leary, claimed yesterday the new low fares proved Ryanair was passing on to its customers the savings being made, by cutting commission to travel agents. Last week, the Competition Authority ruled Ryanair could cut the commission from 9 per cent to 7.7 per cent despite the objections of the Irish Travel Agents' Association (ITAA).
Mr O'Leary said an ITAA delegation had requested Ryanair to increase its fares in March by £5 across the board. Ryanair refused. "Our customers want lower fares," Mr O'Leary said.
Aer Lingus is monitoring the effect on its business of Ryanair's cut in agents' commission. Some 70 per cent of Aer Lingus's passenger revenue comes from travel agents and it cannot afford to alienate the trade. Aer Lingus sources said it might be two months before it could clearly identify whether there was a competitive advantage or not in following Ryanair's lead.
Ryanair will fly to Beauvais outside Paris. Aer Lingus says passengers want to fly into Paris's main airport, Charles de Gaulle, which it serves. But Aer Lingus now" faces competition there too from another Irish airline, Cityjet. The latter announced it is to begin service between Dublin and Charles, de Gaulle on May 1st. Cityjet fares will start at £99 plus tax.