Ryanair boss Michael O’Leary is considering re-launching the tour operation it shelved almost a decade ago.
In a newspaper interview, the CEO said offering packages would allow probably allow Ryanair to charge more for its flights.
He told The Telegraph he would ‘review the situation’ once the airline has squeezed as much growth out of its 350 new aircraft on order.
It wouldn’t be the first time Ryanair has tried its hand at a tour operation, having launched Ryanair Holidays in 2016. At the time, it claimed would it become ‘the Amazon of air travel’, but the operation was ditched after just two months.
Even as recently as this year Michael was still insisting that package holidays would be ‘a distraction’ from the growth of Ryanair’s short-haul services.
However, The Telegraph this week quoted Michael saying: “I wouldn’t rule out setting up a holidays division. The holiday product is probably a reasonable way of charging higher fares and yields and for wrapping it into a package.”
Ryanair’s closest rival, easyJet, is expecting to make £180 million profit from selling package holidays this year, while Jet2 has grown to become the UK’s biggest tour operator.
Meanwhile, Ryanair might be carrying a record number of passengers – which were up 8% to 20 million last month – but it has been forced to cut its fares by 5% this summer to keep its aircraft almost full.
Michael conceded that easyJet holidays has been ‘reasonably successful’ since it was relaunched in 2019 by CEO Johan Lundgren, previously Group Deputy CEO of TUI.
But he suggested that while easyJet needed to squeeze the maximum yield from scarce capacity at expensive and congested airports like London Gatwick, Ryanair was still growing at secondary hubs, like London Stansted.
He said he will consider re-launching a tour operation only if he was certain it wouldn’t ‘move yield out of the airline and into the holidays division’ and that it ‘wouldn’t be too burdensome to manage’.
While easyJet flies around 100 million seats a year, Ryanair is almost twice as big with 192m, meaning a tour operation would be harder to handle – but also a potentially bigger threat.
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In a newspaper interview, the CEO said offering packages would allow probably allow Ryanair to charge more for its flights.
He told The Telegraph he would ‘review the situation’ once the airline has squeezed as much growth out of its 350 new aircraft on order.
It wouldn’t be the first time Ryanair has tried its hand at a tour operation, having launched Ryanair Holidays in 2016. At the time, it claimed would it become ‘the Amazon of air travel’, but the operation was ditched after just two months.
Even as recently as this year Michael was still insisting that package holidays would be ‘a distraction’ from the growth of Ryanair’s short-haul services.
However, The Telegraph this week quoted Michael saying: “I wouldn’t rule out setting up a holidays division. The holiday product is probably a reasonable way of charging higher fares and yields and for wrapping it into a package.”
Ryanair’s closest rival, easyJet, is expecting to make £180 million profit from selling package holidays this year, while Jet2 has grown to become the UK’s biggest tour operator.
Meanwhile, Ryanair might be carrying a record number of passengers – which were up 8% to 20 million last month – but it has been forced to cut its fares by 5% this summer to keep its aircraft almost full.
Michael conceded that easyJet holidays has been ‘reasonably successful’ since it was relaunched in 2019 by CEO Johan Lundgren, previously Group Deputy CEO of TUI.
But he suggested that while easyJet needed to squeeze the maximum yield from scarce capacity at expensive and congested airports like London Gatwick, Ryanair was still growing at secondary hubs, like London Stansted.
He said he will consider re-launching a tour operation only if he was certain it wouldn’t ‘move yield out of the airline and into the holidays division’ and that it ‘wouldn’t be too burdensome to manage’.
While easyJet flies around 100 million seats a year, Ryanair is almost twice as big with 192m, meaning a tour operation would be harder to handle – but also a potentially bigger threat.
The post Ryanair re-considers launching package holidays in wake of easyJet’s success appeared first on Travel Gossip.
Continue reading...
