Ryanair Deepens Fare Cuts to Fill Jets as European Demand Wanes
Sharper yield decline helping to spur forward bookings
Market needs stimulus as terror attacks, Brexit take toll
Ryanair Holdings Plc told analysts it’s cutting prices more than anticipated this summer, helping to boost bookings and increase occupancy levels on its flights.
Ryanair’s yield, a measure of revenue per kilometer flown that reflects fares, is expected to fall between 8 and 9 percent over the first half ending Sept. 30, steeper than the 6 to 8 percent drop originally expected, Europe’s biggest discount carrier said by e-mail, confirming comments at an analyst briefing.
At the same time, August and September bookings are up 1 percentage point from a year earlier. That could help Ryanair attain a 96 percent load factor in the fiscal second quarter, Barclays analyst Oliver Sleath said in a note.
Europe’s airlines are discounting tickets as terror attacks spanning Germany, France and Belgium to Mediterranean resorts depress demand for travel and Britain’s decision to leave the European Union impacts the economy. Ryanair Chief Executive Officer Michael O’Leary has said he’ll always cut prices where necessary to fill planes and protect his company’s market share.
At the same time, Dublin-based Ryanair will hold off on further share buybacks after investors gave the go ahead to repurchase a further 10 percent of stock.
“As long as cash flows remain strong, we will look to return cash to shareholders,” the company said. “However it will likely be 2017 before we announce anything.”
Ryanair said it will move towards requiring passengers to register on its website in order to book flights, a move aimed at gathering more customer data that the carrier can use to help personalize future sales offers and extras.
Membership of the MyRyanair program should increase to 15 million people before the end of March, from 11 million now, the carrier estimates.
“Mandatory sign-in is then a natural evolution as the vast majority of customers will want to be members to enjoy the benefits and the exclusive offers,” spokesman Ronan O’Keeffe said.