Ryanair slashes cheap flight prices

Responding to plummeting confidence in the European market, Ryanair announced yesterday it would slash fares this winter.

The Irish no-frills carrier has initially released five million seats for €5 (£3.90) one way for travel in October and the first two weeks of November this year.

The move was in response to a weakening of the market in recent months.

Releasing a statement to coincide with its annual general meeting yesterday, Europe's largest no-frills carrier warned further airline failures could follow XL Airways, Futura and Zoom.

"Ryanair believes that many unviable loss making European airlines will cease trading this winter because of unsustainable losses and insufficient cash reserves," said the carrier in a statement.

However, Ryanair itself expects to break even this financial year, as the price of oil retreats to $100 a barrel. This reverses the position expected in the summer, when Ryanair said it would make the first loss in its 20 year history if fuel prices remained over $130 a barrel.

Mergers are also likely to follow, according to outspoken group chief executive Michael O'Leary.

"There is no doubt that most of Europe's flag carrier airlines will merge into three large high fare groupings led by BA, Air France and Lufthansa this winter," said Mr O'Leary.

"By contrast Ryanair will continue to compete with (and beat) these mega carriers by offering lower fares, consumer choice and better punctuality."

easyJet - Europe's second-largest carrier - said this week it was reducing capacity growth plans by about four per cent, meaning it will fly planes less often this winter as demand softens, in line with moves by other no-frills airlines.

Chris O'Toole