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Ryanair planning first fare increase in four years; JetBlue considering HQ move

21-Jan-2010

Ryanair’s shares slipped 1.5% yesterday, as the carrier’s CFO, Howard Millar, stated Europe’s largest LCC is planning its first fare increase in four years, in order to sustain earnings growth amid ongoing route expansion. The carrier is likely to raise fares in FY2010/2011 (commencing 01-Apr-2010), and is also targeting further cost reductions.

Mr Millar commented, “we’re in the midst of recession and we expect to slow down our growth. We’ve had a lot of discounting of fares as we’ve grown the business. We expect to increase profits by the combination of reducing costs and we think average fares will probably rise.”

The carrier, which aims to boost earnings to EUR800 million in 2012, last increased fares, by 7%, in FY2007, which was followed by a 1% decline in FY2008 and an 8% reduction in FY2008. The carrier currently has an average fare of EUR66, according to Mr Millar.

JetBlue considering HQ move

In the US, JetBlue Airways spokeswoman, Alison Croyle, stated the LCC has been studying a possible move of headquarters from New York to Orlando for more than a year, commenting, “we’re still evaluating options and anticipate a decision in the first half of this year”.

The carrier, which has been expanding its US-Caribbean network, is considering moving at least some offices to Orlando, with any decision to effect the corporate headquarters as well as the finance department operations in Connecticut. However, it would maintain its operational home at New York JKF Terminal 5, which handles approximately 23% of the carrier’s daily departures.

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Selected LCCs daily share price movements (% change): 20-Jan-2010


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