Ryanair steps up flights in Italy as Alitalia suffers

Irish low-cost airline Ryanair announced on Tuesday a major increase in the domestic flights it offers in Italy including launching a hub at Rome's Fiumicino Airport.

The expansion comes a day before the deadline for a crucial capital injection into struggling Italian flag carrier Alitalia which has been on the brink of having its planes grounded, but Ryanair said its move should help the airline in its efforts to restructure.

Ryanair announced it will base six aircraft at Fiumicino, Rome's mostly domestic airport, and slowly transfer the flights it had operated from Ciampino airport and increase to nine the number of domestic Italian routes it flies.

The number of aircraft based there could double within a year as it receives new aircraft from Boeing.

Ryanair said it would continue to develop domestic and international flights from Ciampino, the mostly international airport.

Ryanair said its one-way flights on new domestic routes will start at 49 euros ($66) including taxes, compared to 75 euros on Alitalia flights.

Nevertheless Ryanair said this would benefit Alitalia as it would ensure the feeding of passengers into the international flights it operates from Fiumicino.

"Ryanair will guarantee that connectivity to Rome and to southern Italy will be maintained regardless of Alitalia's plans to reduce capacity on domestic routes," said Ryanair's deputy chief executive Michael Crawley in a statement.

The Irish airline said it was willing to cooperate with Alitalia, an offer the Italian company swiftly rejected.

"Alitalia thanks Ryanair for its proposal to collaborate at Rome Fiumicino airport, but we have our own strategy..." said the Italian airline.

A 300-million-euro Alitalia capital subscription expires on Wednesday.

Air France-KLM, which owns a 25 percent stake in Alitalia, has said it won't participate as it believes the restructuring plan put forward by the company won't lower costs sufficiently to make the airline successful.

The Italian government is looking for another major international airline to partner with Alitalia.

The state-owned Italian postal service has been tapped to contribute up to 75 million euros in the capital increase, triggering rivals' allegations of illegal protectionism.

Alitalia says Italian banks are also lined up to lend it 200 million euros.

The airline was already bailed out by taxpayers five years ago in a controversial operation that handed a consortium of private Italian companies a majority stake, part of which was later sold to Air France-KLM.

But it still struggled and racked up losses, with its debt now standing at 1.2 billion euros.

It was nearly grounded last month when Italian energy group ENI threatened to stop fuel supplies because of unpaid debts.

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Ryanair slashes annual profits forecast

Irish no-frills airline Ryanair on Monday slashed its annual profits forecast for the second time since September, blaming the cut on lower fares.

The Dublin-based carrier expects annual profit after tax of not more than 520 million euros (US$701 million), it said in a results statement, which compared with a forecast at the lower end of a 570-600 million euros range given just two months ago.

"We now expect the full year outturn to be between 500 million euros to 520 million euros due entirely to this lower fare environment," Ryanair said in the statement. Ryanair's fiscal year runs to the end of March.

Ryanair added that net profit rose 1.0 per cent to 602 million euros in the group's first half, or in the six months to the end of September, as traffic rose 2.0 percent to 49 million passengers.

"We are pleased to report slightly increased first half profits, particularly against a backdrop of softer fares this summer," Ryanair chief executive Michael O'Leary said in the statement.

Ryanair added that from February it will move to fully-allocated seating on all flights, ensuring that families sit together.

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Ryanair to buy up to 200 Boeing planes

Irish no-frills airline Ryanair has placed an order for up to 200 Boeing planes worth US$18 billion (13.8 billion euros) at list prices, the Irish Independent said on Tuesday.

The order, set to be confirmed by US President Barack Obama and Irish Prime Minister Enda Kenny at the White House next week, is the single-biggest aircraft purchase ever agreed by Ryanair, the newspaper said.

Asked about the report, a Ryanair spokesman told AFP that the airline "does not comment upon, or engage in, rumour or speculation."

The order would be used to replace some existing 737 aircraft, while allowing the carrier to possibly extend its footprint beyond Europe, the paper said.

The report comes as Ryanair appeals a recent decision by the European Commission to block a third attempt by the airline to take over its Irish rival Aer Lingus over competition concerns.

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A big score for Boeing with this huge order from the low cost carrier. With a current fleet size of 305 B737s, it's another strong signal for the aviation world that the low cost business is the way to go. This also signify there will be more jobs for future pilots, and it is good news for those residing in Europe.