EasyJet denies Ryanair hit after fares fall further

Easyjet reported a further decline in average fares yesterday but dismissed claims that competition from the rival no-frills carrier Ryanair was the cause of the fall.

Ray Webster, easyJet's chief executive, pointed out that the two low-cost carriers competed directly on just one route - Stansted to London - and said that the incessant attacks on easyJet by Ryanair's Michael O'Leary were designed to distract attention from his own underlying problems.

"I think a lot of the profit growth at Ryanair is coming from Ireland while the new routes he is launching, particularly since taking over Buzz, are unprofitable," said Mr Webster.

EasyJet's average fare for the April-June period fell by 3 per cent to £46.08 compared with the same period in 2002 but the fall in ticket prices was less than in the first half of easyJet's financial year between October and March.

The Luton-based airline also said that the number of seats being filled on each flight was up on the same period last year with load factors rising by 1.8 points to 84.8 per cent in the April-June period. Passenger numbers in the three-month period were up 98 per cent to 5.2 million, which is in line with the planned increase in capacity. Forward bookings for the remainder of the year were showing strong growth, easyJet added.

The market took heart from the recovery in yields compared with the first half. But easyJet's warning that market conditions remained uncertain and its emphasis on how "highly dependent" it remained on the final quarter's trading unnerved dealers. EasyJet shares closed 3 per cent lower at 231p, still well above their low of 167p in June after Ryanair signalled a fresh price war this summer.

Easyjet also disclosed that it had short-listed half a dozen airports for talks about expanding the airline's European route network. It currently flies 105 routes between 38 airports.

EasyJet is likely to pick one or two of the shortlisted airports to launch new services next summer as its fleet begins to grow with the arrival of its Airbus aircraft. The first two Airbus A319s are being delivered in September and by the autumn of next year easyJet will have 23 Airbus aircraft in service, swelling its fleet from 75 aircraft to 91.

Meanwhile Ryanair suffered a setback after a German court barred it from advertising that it flies to Dusseldorf when in fact the airport is close to the Dutch border 70 kilometres from the city. Ryanair said it would appeal against the ruling of the Cologne court and accused Lufthansa and Dusseldorf airport of being behind the suit brought by the Centre Against Unfair Competition.

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