Ryanair has moved into direct competition with tour operators by selling bonded package holidays alongside its flights.
The Irish airline claimed it would “transform the market” as it launched Ryanair Holidays online, claiming to undercut competitors by offering rooms at 330,000 hotels across Europe with the cheapest flight seats.
The move comes more than five years after rivals EasyJet launched a similar service.
Kenny Jacobs, Ryanair’s chief marketing officer, said that “consumers have been paying too much for package holidays for years,” adding that the company would forgo standard commission rates to drive sales. Many Ryanair flights could be free in a decade, says its chief who told a press conference in London, “If you’re looking at a package holiday on Ryanair Holidays you will see that typically our customers will save at least €40 on every single seat that they’re booking.
“If you take those flight savings that you make versus any other airline and apply those to a package holiday, a mum, dad and two kids will save at least 10% on a package holiday.”
Ryanair Holidays has been launched in the UK, Ireland and Germany, with other countries to follow next year.
Jacobs said: “We are also willing to invest our part of the commission to drive conversion of this and it’s a market which has a huge amount of commission, so we’re confident this will be the best value for European consumers in the market.”
Ryanair had already been selling hotel rooms and car hire online but not as packages, potentially leaving customers at risk. The holidays will now be fully Atol-bonded, protecting consumers if an operator goes bust. Rival airline EasyJet launched its own EasyJet Holidays site back in 2011, and expanded it across Europe in 2014.
The new Ryanair venture will work in a partnership with Spanish tour operator Logitravel and accommodation provider World2Meet, offering 3- to 5-star hotels throughout the Mediterranean and European cities.
Ryanair has been seeking to remould itself from an airline to a broader digital business. As well as package holidays, Ryanair is also considering offering events tickets, restaurant bookings and other travel-related services in the future.
As it cuts fares further this year, an increasing proportion of Ryanair’s revenues are expected to come from ancillary streams, using data on its customers registered on MyRyanair. Last week, chief executive Michael O’Leary said he had a vision of “free air fares” in future, with profits made from growing other purchases from captive customers.
