Lufthansa slams Ryanair fare policy

Lufthansa slams Ryanair fare policy

Lufthansa’s chief exeuctive has slammed as “irresponsible” Ryanair’s move to charge less than €10 for tickets on certain German routes, saying the airline won’t be pushed out of its home market.

Ryanair is selling tickets from Berlin costing less than €10 to cities including Budapest, Barcelona and Rome. 

The one-way fares exclude checked bags or reserved seating.

In a Swiss media interview, Carsten Spohr criticised Lufthansa competitors for offering ultra-cheap and unprofitable fares as a price war squeezes industry earnings.

Mr Spohr described the practice of charging less than €10 for plane tickets as “economically, ecologically and politically irresponsible”.

Lufthansa lowered its 2019 profit forecast last month, citing a decline in air fares caused by competition from low-cost rivals in Europe particularly Germany and Austria.

“Nobody is going to push us out of our home markets. The price war leaves its traces with us as well,” Mr Spohr said.

Lufthansa slams Ryanair fare policy

Ryanair’s bumpy year continued with the announcement of the departure of its chief operating officer Peter Bellew late last week. 

In May, the airline group — which sees Germany as a key growth market — reported its weakest annual profit in four years and said continued low fares could eat into earnings for the next couple of years.

But, chief executive Michael O’Leary said Ryanair would be well-placed for “attritional fare wars” as it has the lowest cost base.

Meanwhile, Mr Spohr also said he expects Lufthansa’s passenger numbers to rise by about 4% this year, playing down talk that public support for teenage climate activist Greta Thunberg might be curbing air travel.

“At this time we don’t see restraint — in fact, the opposite,” he said.

Ryanair recently reported an 8% rise in monthly passenger numbers for June and Davy expects its first half passenger growth to be between 11% and 12%.

Ryanair is expected to report weak first-quarter figures at the end of this month, though, with profits potentially down 20%.

Additional reporting Reuters and Bloomberg

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