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Friday, 21 September, 2001, 14:16 GMT 15:16 UK
Budget airlines cut fares
Ryanair aircraft
Ryanair: Sees opportunities for growth
Two of Europe's leading budget airlines have said price-cutting - and not state aid - is the answer to the crisis facing their industry.

Airline shares
British Airways down 11%
Ryanair down 8%
Easyjet down 14.4%
Ryanair and Easyjet have both objected to calls by larger carriers for state aid to overcome the dramatic drop in passenger numbers, and the soaring cost insurance, security and fuel costs, in the wake of last week's terrorist atrocities.

Ryanair has even accused its upmarket rivals of overstating the after-effects of the attacks on the US to gain government hand-outs.

Ryanair's chief executive Michael O'Leary told BBC Radio 4's Today programme that job cuts in the industry were inevitable before last week's tragedy.


"The industry is reflecting what would have happened anyway," he said.

The industry is reflecting what would have happened anyway

Michael O'Leary, chief executive, Ryanair

"There were going to be large job losses before last week's events.

"Companies were losing money before last week.

"Last week's events may have brought them forward."

Mr O'Leary said that rather than "begging" money from European governments, airlines should slash fares, as it had done.

"We continue to take the same number of bookings per week as we did before the tragic events in the US last week," he added.

Asked if he thought the big airlines had taken advantage of the situation to get money out of the government, Mr O'Leary replied "fundamentally, yes".

Further opportunities

Earlier, in a statement to the London Stock Exchange, Mr O'Leary, was upbeat about Ryanair's prospects.

Difficult though it is, airlines cannot be protected against changes to their operating environment

EasyJet statement

"Over the medium term, we may see some further opportunities with low-cost arrangements being offered by a number of airports who previously would not have looked to Ryanair for traffic growth.

"The price of new and second-hand aircraft may also fall as carriers cancel orders, and dispose of jets rendered surplus by the current reductions in flight schedules.

"This price fall could further Ryanair's ambitions to buy up to 50 aircraft to underpin growth from 2003 onwards, Mr O'Leary said.

He added: "State aid to selected state airlines that were loss making before last week's events cannot be justified by the impact of last week's events."

Back in business

Ryanair's chief rival, Easyjet, has also objected to state aid for European airlines.

"Difficult though it is, airlines cannot be protected against changes to their operating environment," the budget carrier said in a statement.

The Luton-based carrier has launched massive price cuts on all its routes from the UK.

Prices between 15 October and 31 January have been reduced in order to demonstrate that it has got back to business.

However, Easyjet has joined calls for UK government help with the soaring cost of insurance in the wake of last week's terror attacks.

Chief Exec of Ryan Air Michael O'Leary
"The industry is reflecting what would have happened anyway"
See also:

21 Sep 01 | Business
US offers airlines $15bn aid
20 Sep 01 | Business
EU considers aid for airlines
19 Sep 01 | Business
US airlines lose 40,000 more jobs
17 Sep 01 | Business
UK airlines 'need government aid'
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