Ryanair’s growth plan goes down the drain
by Abbey on 18/11/09 at 10:26 am
According to Stelios Haji-Ioannou, establisher of EasyJet, the plan of its competitor Ryanair concerning the company’s growth can lead to a sticky end. It is very important for Ryanair in Dublin to augment numbers of passengers by 50pc over next two-and-a-half years. Such plan will help to fill its 200 aircraft and also other 100 on order.
Mr Haji-Ioannou was against the strategy at Luton-based EasyJet, the aim of which was to increase the number of seats by 7.5pc a year in July, despite the fact that 15pc was an average of the seat numbers between 2005 and 2008.
Mr O’Leary considered that there is no use to fulfill such plan and, moreover, the company did not have future. He also added that in case Stelios was ready to rival with Ryanair, the company would have to diminish its ticket prices.
It was noted that during six months the average ticket price of Ryanair went down 17pc to €39. As for EasyJet, its passenger income per seat went up 6.4pc to £41.42 in the third quarter by the end of June 30.
One should say that Ryanair is considered to be number one discount airline in Europe and was planning to purchase the 200 aircraft from Boeing by the end of the year.
Soon negotiation will be carried between Ryanair and EasyJet. But even now one can feel tense atmosphere between the companies. Mr O’Leary said that he would go away from negotiations and even abrogate some commitments in case it was impossible to make a deal.
“It must be difficult for Stelios to see us continue to grow while his airline grows more slowly, if at all,”said Stephen McNamara, spokesman of Ryanair.
According to Mr Haji-Ioannou, EasyJet offered a growth plan that was considered to be more reasonable and much more profitable. “The company is performing very well and the growth rate has been moderated,” said Mr Haji-Ioannou
During this year EasyJet earned 33pc and the value of the company is £1.59bn, as for Ryanair, its shares fell 3.4pc and worth €4.24bn.
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Roman
Nov 19th, 2009
easyJet and Ryanair have a very different strategy. I also think that easyJet strategy is less risky, the simple fact that easy seeks business travelers is a very important fact in these gloomy economic situation.
Dave
Nov 19th, 2009
Indeed. I can’t really see a business traveler opting for Ryanair. Services are unprofessional, delays – often and fees are many.