Ryanair boss suggests future of free flights, possibly triggers price war

RYANAIR is cooking up bold new plans for cheaper airfares that could benefit travellers everywhere.

Free air travel could be part of an exciting future at Ryanair. Picture: Zuma Press

RYANAIR has hinted at flight tickets as low as $8 — and even flights that are completely free — as the budget airline further slashes its already rock-bottom airfares.

Despite airport strikes and security concerns weakening the demand for travel, Ryanair, Europe’s biggest airline, has managed to record annual profits and passenger numbers.

Now the airline is vowing to pass its good fortune onto passengers, announcing it would slash airfares by as much as seven per cent in the northern summer and 12 per cent in winter.

The no-frills airline said it could manage cheaper fares due to the low cost of oil and by squeezing more seats onto planes — however, they will do this by introducing more “slimline” seating that create less room for passengers.

Speaking at a Ryanair event this week, the airline’s boss Michael O’Leary said he couldn’t see why prices couldn’t go even lower.

A Tuesday, April 24, 2016 photo of Ryanair Chief Executive, Michael O'Leary, right, at the airline's Dublin headquarters addressing media alongside Ryanair marketing director, Kenny Jacobs. European budget carrier Ryanair has posted record full-year profits and passenger figures, Monday, May 23, 2016, and expects both to hit new highs this summer amid rapid growth and declining fares. (AP Photo/Shawn Pogatchnik)

“My plan is that the average fares on Ryanair would be €10 ($AU15.50) in the next five years,” he said.

“I’d see no reason why they can’t be €15, €10, €5 ($AU23, $AU15.50, $AU8). Why not even free?”

O’Leary said he thought the cost of flying could hit rock-bottom as long as passengers continued to fork out for extras such as car hire, travel insurance, hotels and checked bags.

“As long as we can persuade people to buy additional, optional services, then I see no reason why we can’t keep driving down the underlying airfare,” he said.

Ryanair. Picture: Mikelo/Flickr

According to Ryanair’s latest annual report, the money the airline brought in from those extra services was up 13 per cent year-on-year, accounting for nearly a quarter its total revenue.

O’Leary also challenged rival airlines to follow suit.

“If other airlines want to compete with us on price, then we will lower our prices again,” he said.

Analysts say Ryanair was well-placed to ignite a price war.

“Ryanair is a major player in many of the markets and airports it flies to,” Robin Byde from financial services firm Cantor Fitzgerald said.

“If it cuts prices, other airlines will have to respond to that.”

This year, Ryanair posted net profits before exceptional gains of $AU1.93 billion — a year-on-year rise of 43 per cent.

The percentage of seats sold rose five points to 93 per cent, and total passengers for the year rose 18 per cent to 106.4 million.

The 30-year-old carrier is planning to expand its fleet and routes.

The airline is planning to grow its fleet of Boeing 737-800s by 53 aircraft this year to reach 380.

It is also expanding towards the east, with seven new bases, including in Bucharest, Prague, Sofia, Hamburg and Nuremberg.

Anxiety among travellers due to the threat of global terrorism has taken a toll on the travel industry. In November, it was feared the terror attacks in Paris could wipe $AU1.3 billion off the value of the tourism industry in Europe alone.

European carriers EasyJet, Lufthansa and International Airlines Group, which owns British Airways and Iberia, have all suffered a hit to sales as anxious passengers reconsidered travel plans, according to CNN.

EasyJet, the largest carrier in the UK, said this month it had slashed fairs to draw back passengers.