Pat O’Shea Comments on Ryanair’s 25% share Price Fall

29th Jan 2004

Speaking today in Cork, Pat O’Shea, Managing Director of Openjet Ltd. described the fall in value of Ryanair’s share price as “foreseeable”.
O’Shea who runs
, said that the market had woken up to a few flaws in Ryanair’s current business plan.

“Ryanair face challenges in the coming months; it looks like they will lose the Charleroi case, and face millions in fines from the EU, from what will be deemed illegal state aid to an airline. This will open the door to airlines such as Virgin-Express suing Ryanair due to the unfair competition this illegal aid would have constituted.

Falling load factors, lower prices for the bums the can put on their seats will all impact on the profitability of Ryanair. Michael O’Leary has already got the lowest cost base of any airline in Europe, and is seeking to lower this again- a difficult task.

Finding new passengers for his 125 aircraft he [Michael O’Leary] ordered from Boeing may be difficult too.

Our experience in the low fares industry is a bit closer to the consumer, and what I find is many of them are weary of the secondary airports that Ryanair use; people use Ryanair once, then find they have been duped into traveling to a secondary airport and incur both loss of time and money to get to their final destination; the next time they travel they avoid Ryanair like the plague and go for a low cost airline that flies them to a city airport- like easyJet or Aer Lingus.”


p>Ryanair blocked O’Shea’s company openjet from accessing it’s [Ryanair] website last July, in what O’Shea believe as being another illegal anti-competitive move called on O’Leary today to allow openjet access to Ryanair website.


O’Shea says he has in excess of 250,000 visitors a month to his website, many of them non-EU customers looking for bargains in European travel; we can offer Michael’s fares to these people, and maybe take a small bit of a burden from Ryanair’s marketing budget.


“At least 35% of Ryanair’s routes are quite good and centre around larger population centres, openjet could add to the decreasing load factors Ryanair is experiencing on these routes, at zero cost to them. However I am afraid even, the low fares experts cannot help Mr. O’Leary with some of his wilderness routes, as already features carriers that fly to more central airports, which will always be more popular, even though they may cost €10 more to fly to.”

O’Shea added, “we would like to remind Michael of our invitation to reduce his €14m tax bill by investing in a business expansion scheme to fund Openjet’s growth, which has been extended- sometimes it seems that our calls to Ryanair fall on deaf ears. But maybe Michael didn’t take up our previous offer as he may have resigned to the fact that Ryanair’s trading conditions will have lowered his tax bill ofr him anyway.”

Openjet called on Michael O’Leary to reduce his tax bill last November by investing in openjet.




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