Ryanair is no longer the European champion of low cost flights. For the first time since its foundation in 1985, the Irish company lost the all-British derby with the English Easyjet, created ten years later and, although still behind on the passenger front, now in the lead in terms of profits.
While in fact Easyjet travels on a pre-tax profit estimated at between 560 and 570 million euros in the third quarter (the results will be communicated on 19 November), the vector of the advertising scandal against Italy today revised downwards its forecasts for the 2013 financial year (which closes on 31 March) to 500-520 million, against the 570 initially expected.
The cause of Ryanair's downsizing lies not so much in the drop in passengers and flights, where the Irish continue to be the leader with 1.100 routes between Europe and North Africa (8 million passengers in September, against Easyjet's 5,1 million), but rather in the drop in prices, due precisely to increasingly fierce competition. In fact, last winter Ryanair lowered its prices by 10% on average, increasing profit per passenger seat by just 1% in the summer season, against +6% for its British rival.
The strategy of the company, which in Italy has its main bases in Orio al Serio (Bergamo), Pisa and Ciampino, therefore seems to be in decline, always based on highly competitive prices and less on the quality of service, on which instead it focuses more Easyjet, based in Italy at Malpensa, Linate and Fiumicino and now increasingly aimed at business customers.
And the flop also spills over to performance on the Stock Exchange: today in London, after the news of the lower forecasts, Ryanair shares plunged by 12%, as had already happened two months ago in a similar situation. Since January 1, Irish shares have gained 14,43%, trending negative in recent weeks, while rivals Easyjet are up 62,51% over the same period.
