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Tuesday, November 4, 2008

Ryanair set for £8 flights to US

Ryanair jet landing
Ryanair plans to undercut its struggling competitors on prices

Budget airline Ryanair is to offer flights to the US for eight pounds, by buying planes from struggling rivals.

The plan will be revealed when chief executive Michael O'Leary announces the firm's quarterly results on Monday.

"Economy class will be very cheap, around 10 euros, but our business class will be very expensive," he said in a newspaper interview.

Ryanair's second quarter profits are expected to fall, due to higher fuel prices and its decision to cut fares.

Mr O'Leary is expected to announce plans to buy more than 50 extra aircraft, as part of plans to beat the recession by undercutting more expensive rivals.

"We'll just have to keep flying more aircraft, opening up more routes and offering people more cheap flights," Mr O'Leary said.

Profits down

The flights - which could begin by the end of next year - would be available for those booking early. Passengers would pay airport taxes on top of the fares.

The transatlantic flights are likely to go from Stansted and Dublin airports to New York, Florida, Los Angeles, San Francisco and Boston.

Meanwhile, it is expected that Ryanair's quarterly profits will drop significantly.

Royal Bank of Scotland is forecasting net earnings of 145m euros (£115m; $184m) for Ryanair for the second quarter, down from 260m euros last year.

While the oil price has come down lately, analysts say Ryanair is still suffering because it insured against changing fuel costs at too high a price.

Mr O'Leary has said he expected the airline to make a profit for the full year as long as oil stays below $70 a barrel.