Ryanair plans more GDS partnerships

Ryanair has announced it is in talks with other GDS providers to expand its distribution.

The carrier’s chief executive Michael O’Leary revealed the discussions as part of the carrier’s full-year financial update, which also unveiled new products for the family and business travel markets.

The low-cost carrier started to sell through Travelport platforms in April.

“We are in talks with other GDS‘s (to broaden our distribution base) and hope to add more before year end,” he said.

The GDS talks are in addition to a new family product that will launch in June and a business service in the autumn that the airline hopes, along with other measures, will help it receive a profit boost in the full-year 2015.

The family launch will provide discounts for children and frequent flyer benefits, while the business offering will including same-day flight change ability; larger bag allowances; premium seat allocation; a mobile boarding pass and fast-track through security.

Plans are also in place for more advertising as its digital strategy is rolled out. This will include a new mobile app and improved digital marketing in the next year.

Details of Ryanair’s strategy came as the airline announced a fall in profits for the full-year ending 31 March 2014, the first time in five years for the carrier.

The airline still posted a net profit of EUR523 million for the year ending 31 March 2014 but this was 8% down on the same period last year.

While the profits saw a dip its passenger count increased 3% to 81.7 million, while revenues were up 3% to EUR4.88m.

Its revenue per passenger remained the same, after strong ancillary sales balanced out a 4% decrease in the average fare.

“Forward bookings for summer 14 are significantly ahead of last year, since we began offering lower fares and released our seasonal schedules earlier, and this should continue to deliver 2% higher load factors, and help us manage fares closer to departure as we have less capacity to sell,” said O’Leary. “We released our winter 2014 schedule 3 months earlier than last year, offering our customers lower fares much earlier than our competitors, while we focus on building frequency and capacity on key business city pairs.”

Ryanair introduced a strategy to improve its customer experience in the latter half of the year, introducing allocated seating, a new website and changes to its booking conditions.

Lower fares, weaker sterling and higher fuel costs were attributed to its profit dip.

O’Leary said he expects traffic to grow a further 4% by its next year-end results to more than 84.6m people. Fares are expected to rise 2% and along with reduced fuel costs and more advertising is expected to bring profits between EUR580-620m for full-year 2015.

New aircraft will also start to be delivered in the latter half of this year.

O’Leary added: “H1 fares will rise by up to 6% due in part to Easter, stable growth in Q2, and stronger forward bookings and load factors. However we remain very cautious about H2 guidance (especially following last winter’s weak price environment) where we are committed to 6% capacity growth which could cause H2 fares to fall by as much as 6% to 8%.”