Ryanair to cut fares by 20% as pressure grows
In a move which is certain to cause ripples throughout the budget airline industry it has been revealed that Ryanair will cut passenger fares by 20% in a last ditch effort to maintain passenger numbers as business and the industry continues to falter.
Just when it seemed as though the industry would benefit from a reduced oil price, the pressure has been cranked up even further with passenger numbers well down and income streams under pressure. Balance sheets are being pushed to the limit as the industry readies itself for what may well be the sharpest downturn in modern history.
It will be the budget airlines that will suffer first as they have historically worked on high-volumes and very thin margins. Even the smallest downturn in passenger numbers can have a large impact upon the bottom line, something which has seen the share price of the leading budget airline companies come under extreme pressure of late.
While the likes of Ryanair are not in a fight for survival the group is certainly under extreme pressure. Quite what will happen in the short term remains to be seen but there appears to be very little light at the end of the tunnel for the sector as a whole.
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