Ryanair, the budget airline, is closing its website for three days next week after missing a deadline set by the Office of Fair Trading (OFT) to remove misleading prices from the site.
The expensive shutdown will allow Ryanair to revamp its website and meet the OFT’s rules for including taxes and other charges within headline fares.
It could cost the carrier £20 million in lost revenue and is a further blow after it said that profits could halve next year because of worsening economic conditions.
Concern over the airline’s strategy has prompted Deutsche Bank to give warning of a possible “business model failure”.
The OFT gave Ryanair a deadline of January 31 to make changes to its fares. When this was missed, the Ireland-based carrier was given a new deadline of the end of February. The airline is understood to have told the OFT that next week’s three-day website shutdown was to enable it to comply with the new rules.
Advertisement
If it had missed yet another deadline, the OFT could have begun enforcement proceedings against Ryanair. This could have resulted in a court order to shut down the airline’s booking system until the fare changes were made.
The OFT was concerned that airlines were misleading passengers by advertising low fares that did not include extras, such as tax. However, Ryanair said yesterday that it was closing online bookings only to expand the website’s capacity.
A spokesman said: “Our software was designed to cope with 50 million passengers a year and we have reached that, so we are introducing a new site capable of handling more.”
A source familiar with Ryanair’s negotiations with the OFT said: “They were given until the end of February to make the changes and they are now shutting down to make sure they comply.”
The website will be shut for 74 hours from 10pm on February 22 to 11.59pm on February 25.
Advertisement
Ryanair has grown rapidly to become Europe’s largest airline, but it has experienced a number of setbacks in recent weeks. A French court ordered the airline to pay compensation to President Sarkozy and his new wife, the model Carla Bruni, for using their picture in an advertisement.
The airline said last week that its profits for this financial year would be about €470 million (£351 million), but it said that high fuel costs and falling demand could halve that figure next year.
Analysts at Deutsche Bank said that the carrier was failing to get cost benefits from growing passenger numbers and, as a result, had seen a decline in its return on investment. They have called for a “change of strategy”.