Ryanair Steers Towards Big Airports

March 11, 2007

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Irish low-cost airline Ryanair plans to start serving larger airports in a bid to double passenger numbers, its chief executive said in an interview with German business magazine WirtschaftsWoche.

"If we want to be so big in five years' time, we can't avoid such airports," Michael O'Leary told the magazine in an interview released ahead of publication on Monday.

Ryanair has focused its network so far on airports where landing fees and other costs are low.

"Five years from now we will carry 85 million passengers, twice as many as today, and will have expanded our network," he said.

Ryanair plans to use part of its EUR2.4 billion euro (USD$3.2 billion) cash pile to pay a special dividend or buy back shares at the end of the year, the magazine said.

Another part will be used to buy environmentally friendly aircraft and to "frighten off" higher-price competitors such as Germany's Lufthansa, the magazine said.

"We can hold our breath longer in a price war," it quoted O'Leary as saying.

Ryanair does not plan to move into low-cost long haul flights if it is successful in taking over domestic rival Aer Lingus, which has routes to the United States.

"Our business model does not work for intercontinental travel, but we will keep those routes, if they are profitable."

European Commission competition regulators are examining Ryanair's bid for Aer Lingus, formerly the Irish national carrier in which the Irish government still holds a quarter stake, and have set themselves a June deadline for a decision.

The Ryanair bid for Aer Lingus has lapsed but the company has said that it would renew its bid if the EU executive grants approval.