Ryanair talk of late summer fare cuts chills sector
Ryanair warned rivals Monday that it may cut its fares in late summer by as much as 9% from last year, triggering a share sell-off by investors concerned about the impact on profitability. Ryanair has helped drive down short-haul ticket prices in Europe by increasing its capacity by a third, or about 30m seats, in the past 2 years. Some investors thought higher fares in the 3 months to the end of June were a sign that a period of heavy discounting may be ending. But management made clear the annual increase was just a blip due to the timing of Easter and that prices would fall sharply in the coming months. "It's a competitive market out there. You're looking at fares down anywhere between 7, 8, maybe as much as 9%," , CFO Neil Sorahan said, referring to then 3 months to the end of September. <br/>
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Ryanair talk of late summer fare cuts chills sector
Ryanair warned rivals Monday that it may cut its fares in late summer by as much as 9% from last year, triggering a share sell-off by investors concerned about the impact on profitability. Ryanair has helped drive down short-haul ticket prices in Europe by increasing its capacity by a third, or about 30m seats, in the past 2 years. Some investors thought higher fares in the 3 months to the end of June were a sign that a period of heavy discounting may be ending. But management made clear the annual increase was just a blip due to the timing of Easter and that prices would fall sharply in the coming months. "It's a competitive market out there. You're looking at fares down anywhere between 7, 8, maybe as much as 9%," , CFO Neil Sorahan said, referring to then 3 months to the end of September. <br/>
