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Budget airlines hit turbulence

12 May 2007

Ryanair ticket promotions arrive so frequently that investors tend to ignore them. Sure, a £15 flight to Frankfurt sounds like suicidal economics but why worry if profits are soaring?

But this week was different. Europe’s largest budget airline launched its biggest ever fare sale, days after admitting it was struggling to fill its planes. Analysts were extremely surprised to see that the airline was discounting 10m tickets during its most profitable time of year. For all the regulation bluster from Ryanair boss Michael O’Leary about “kicking the competition”, something was wrong. Some analysts have also asked if the onslaught from environmental organisations is having an effect.


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