Ryanair’s ‘Amazon for travel’ plan to double profits

Ryanair’s ‘Amazon for travel’ plan to double profits

Ryanair aims to become the “Amazon for travel” in Europe and almost double annual profits to €2 billion over the next six to eight years, according to chief executive Michael O’Leary.

The budget carrier plans to expand its website into travel and leisure services, such as hotels and concerts.

Ryanair is flying to more primary airports and its website has been upgraded to make it easier to book tickets on the back of its ‘Always Getting Better’ passenger service improvement initiative.

“We now have an opportunity with the new website to build Ryanair.com not just as the airline’s website but as a kind of Amazon for travel in Europe,” O’Leary told the Financial Times.

“All the services will be available on Ryanair.com – hotels, TripAdvisor – we want to disintermediate all the disintermediators…We have the scale to do it.”

Ancillaries were likely to stay about 20% to 25% of total revenue, he said, but make a bigger contribution towards profitability in the future, he said,

The airline wants to increase the number of passengers it carries from about 100 million this year to 160 million over the next six to eight years. Over that period, it is targeting profits of €2 billion.

O’Leary ruled out the likelihood of Ryanair making any big acquisitions but said it could take minority stakes in rivals such as Lufthansa or Air France.

He expects market conditions to remain favourable for the next 12-18 months as low oil prices boost airlines’ profitability.

“The summer peak this year was extraordinary. In all the 28 years I’ve been in the business I’ve never seen such a perfect summer. Even the incompetent airlines made money,” he said, pointing towards the benefits of strong sterling, bad weather in northern Europe, recovering European economies and low fuel prices.

“In the absence of any unforeseen shock, the next 12 to 18 months – with the combination of low fuel prices, low finance costs – most airlines will look like they are geniuses run by management gurus until oil prices tick back up again and [then], as Warren Buffett said, you will see who is swimming naked and who’s wearing trunks.”

Ryanair last week revealed plans to return €400 million to shareholders, bringing the total funds returned this year to €800 million – and more than €3.3 billion since 2008.

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