Europe's two dominant low-cost carriers, Ryanair and easyJet, are retooling their business models after a year of punishing competition from legacy airlines and a wave of new budget entrants pushed both companies' share prices sharply lower.
At a London industry congress in September 2004, Ryanair chief executive Michael O'Leary predicted a winter "bloodbath" in the European budget sector, warning that only a handful of low-fare carriers would survive in the medium term. Ryanair has told investors to expect a 20 percent decline in revenue per passenger for the July-September quarter; its stock has lost roughly 45 percent since January. easyJet shares have fallen more than 60 percent over the same period, with chief executive Ray Webster blaming irrational pricing across the sector.
Margins are caught between falling fares and rising fuel costs. Five low-cost carriers operated in Europe in 2000; that number stood at 49 by the time of the congress.
Both airlines are adjusting in response. Ryanair plans to introduce paid in-flight entertainment at 7 euros per journey and is weighing a ban on large luggage. easyJet, about 40 percent owned by founder Stelios Haji-Ioannou, recently dropped its Zurich service over what it described as excessive airport charges.
Historical summary. TurkishPress restated this AFP wire report, first published in September 2004, in its own words.