O’Leary signals move away from low prices

A shift from Ryanair’s ‘pile it high and sell it cheap’ philosophy has been signaled by chief executive Michael O’Leary.

Comparing the Irish no-frills airline giant with cheap brand-driven supermarkets such as Lidl, he said Ryanair will have to re-focus its emphasis on the quality of its brand, rather than price, over the coming years.

The carrier’s average fare of €40 will not be sustainable in the future as the company attempts to cut costs and moves to more central airports across Europe, according to O’Leary.

“We have to move away over the next number of years from being obsessed with having the lowest fares in the market,” he said. “At the moment we just pile it high and sell it cheap. Lidl started off cheap and cheerful but now it is very sophisticated — it is no longer perceived to be cheap and cheerful,” he said.

Despite all airlines facing pressure on costs, Ryanair will also have to move operations to more expensive central airports across Europe as its seeks to attract more passengers.

But the increase in fares is not expected for a number of years. O’Leary also said he will stay at the helm of Ryanair until the business doubles in size to 400 aircraft, although he did not give a timeframe.

“Then the growth rate slows down to 2% or 3% per year. You will need a different management then. We won’t need my dog and pony show, which is about generating publicity. Every company has to move from being the high-growth Robin Hood,” he said in an interview yesterday.

The airline carried 70.9 million passengers in the 12 months to August 10. 

Ryanair airline has pulled out of Belfast City Airport and is cutting the number of flights from airports such as Shannon and Bournemouth, blaming higher costs.

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