Ryanair has claimed it "is now Ireland's national airline" after announcing 12 new routes out of Dublin which it says will create 200 jobs.
The airline's chief executive, Michael O'Leary, said yesterday several of the new routes would put the two carriers in direct competition with Aer Lingus already flying to Bologna, Almeria, Seville and Madrid. Mr O'Leary said "previously passengers had no alternative to Aer Lingus high fares".
The introduction of the routes will add additional passengers to an already congested Dublin Airport, particularly at peak times. The Dublin Airport Authority, previously Aer Rianta, indicated yesterday that a new Pier D facility, with 14 parking stands, would be ready in time to accommodate the new Ryanair services. The additional services will also make competition for peak time landing and take-off slots more intense.
In a further sign of competition between the airlines, Ryanair is selling seats to 10 out of the 12 destinations for as little as €12. This is likely to put significant strain on Aer Lingus, at a period when it is planning to list on the stock market. According to the last set of figures the State airline's average European fare comes to €66.81, whereas Ryanair's average short-haul fare is pitched at €41.
Ryanair said the new staff would be pilots, cabin crew and ground staff, all of whom would be working with three new Boeing aircraft to be deployed to Dublin by December.
Ryanair last week announced profits of €115.7 million for thefirst quarter ended June 30th, 2006. Traffic grew by 25 per cent to 10.7 million passengers, yields increased 13 per cent and ancillary revenues climbed 31 per cent.
Unit costs excluding fuel fell by 2 per cent (including fuel they rose by 6 per cent) as fuel costs rose by 52 per cent to €167.5 million. The increase in profitability boosted cash balances which rose by €212.4 million to €2.18 billion. Ryanair's margins squeezed up to 20 per cent, among the highest in the aviation world.
Despite the strong figures Mr O'Leary is warning that the airline could post a loss in its final quarter between January and March of next year because of higher oil prices. Mr O'Leary has said this will happen if crude remains over $74 a barrel. These comments have put downward pressure on the share price according to some analysts.
