Home > News > Budget Airlines Fight Back 11357

Budget airlines fight back

Low cost rivals respond to Ryanair

The battle of the budget airlines is taking shape as rivals Jet2.com and Flybe hit back at comments made by Ryanair boss Micheal O’Leary.

Announcing Ryanair’s results yesterday O’Leary said he hoped that rising fuel prices would see rival airlines such as Jet2.com, Flybe, and Flyglobespan go out of business.

But ironically some of the rival low cost airlines are better protected against high oil prices than Ryanair. The Irish airline opted not to buy oil on fixed priced contracts and is now believed to be paying the current market price, which has risen to over $130 a barrel.

In contrast, Flybe and Jet2.com both decided to ‘hedge’ against rising oil prices and buy supplies on a fixed price basis. Flybe is believed to have secured 76% of its fuel on fixed price contracts and will therefore be paying considerably less than current market prices.

Responding to O’Leary’s taunts about rival airlines going out of business Jet2.com boss Philip Meeson says: "It won't be Jet2.com. I'm sorry Mr O'Leary – unlike you, Jet2.com has bought all its fuel for this summer, this coming winter and next summer at attractive rates."

"And because people enjoy flying with Jet2.com, we are having a great year yet again. Our passengers can rely upon us for many, many years to come," Meeson adds.

Flybe says that oil prices would have to rise to over $170 a barrel before it would be in a position where it would only break even. The airline is expected to shortly announce record profits for the past year.

The war of words between low fares airlines is likely to continue for some time to come, but there seems to be no immediate prospect of any of them going bust.

Written by: Nick Purdom