Lift for airport as Ryanair plans new routes

The news came yesterday as the airline said it had slashed average fares to a record low as it steps up the battle for recession-hit business.

Ryanair will open its new Leeds-Bradford base on March 25 with 14 new routes, which will operate in addition to the three existing routes to Dublin, Barcelona and Alicante.

Ryanair's deputy head of sales and marketing Dara Brady said that once the 14 new routes are running, it has plans for more.

"We see great potential for Leeds-Bradford, it's a stepping stone for the region," he said. "We will see further routes coming down the line – we see plenty of scope for new destinations. We are seeing a strong appetite for low fares from Leeds-Bradford customers."

The airline said its decision to cut prices to an average 26 in the last three months of 2009 helped it boost passenger numbers, which grew 14 per cent to 16 million.

Ryanair posted narrower losses of 9.5m in the third quarter, down 90 per cent on last year's 88.8m loss.

Fuel costs fell 37 per cent in the quarter, while average fares dropped by 12 per cent. The airline said fares had dropped as a result of the recession, price promotions and currency fluctuations.

Chief executive Michael O'Leary is slashing fares to attract price-conscious passengers and put pressure on competitors in the recession.

"The environment out there is, from Ryanair's perspective, great, because it's awful," said Mr O'Leary. "It's really difficult out there, but we're doing remarkably well because this is the time when the lowest cost producer wins."

Takings from extra products and services grew more slowly than passenger numbers at six per cent, as customers avoided excess baggage costs.

Ryanair deputy chief executive Michael Cawley said some passengers are spending less on extras like coffees and teas on board.

He said ancillary revenue rates had increased every year for 14 years, but added this "cannot continue" and having risen to above 20 per cent of total sales, these are now predicted to steady at around a fifth of turnover.

Over the first nine months of its financial year, the firm said fares were higher than expected at 29.80. This was driven by strong demand in Germany, France and Spain, where the firm did not need to reduce prices.

But it said the situation in the UK and Ireland remains weak, with regional airports suffering and fares heavily discounted to stimulate demand.

"We flew as many people, but we earned less revenue in doing it," said Mr Cawley.

He said this was partly down to weaker economic conditions and partly because of higher taxes in the UK and Ireland.

Despite the continuing problems in these markets, Mr Cawley is optimistic for Ryanair and said the firm had "turned the corner in demand".

Passenger growth is now expected to slow to six per cent in 2013 from as much as 20 per cent in the year to March 2008.

It plans to launch more than 200 new routes by the end of this summer although it expects between seven and 10 per cent to fail.

The firm now expects to make a full-year profit in the region of 239m.