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Ryanair Set To Slash Fares In High Risk Gamble

It has today been announced that under pressure budget airline Ryanair is set to offer one million seats next month at a rock bottom price of just £5, including taxes and additional charges. The fact that the move will see the group lose at least £5 per seat (as it will not even cover the £10 air passenger duty charge) has surprised many in the industry amid suggestions that this high risk policy to increase demand could easily back fire.

Earlier this month the group forecast a loss for the current year of around Euro60 million, suggesting that falling passenger numbers and higher fuel costs were causing havoc within the industry. The move to slash prices for up to 80% of seats per plane will see loses increase but there are hopes that it will not only put the group back in the industry headlines but also stimulate much needed demand for air travel.

While there are concerns for Ryanair itself the move also has the potential to cause turmoil in the industry with suggestions that many rivals could suffer as a consequence. If this high risk strategy fails to stimulate increased passenger numbers it will leave not only the group, but the UK budget airlines sector in a precarious position.

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