Ryanair Nears Deal With TUI in New Blow to Online ‘Pirates’

Kate Duffy, Bloomberg News

Passengers board an aircraft, operated by Ryanair Holdings Plc, on the tarmac at London Stansted Airport, operated by Manchester Airport Plc, in Stansted, UK, on Monday, Nov. 6, 2023. Ryanair will pay out a dividend of €400 million ($430 million) and plans to hand over about a quarter of annual profit to shareholders as Europe's biggest discount airline benefits from growing traffic. , Bloomberg

(Bloomberg) -- Ryanair Holdings Plc is nearing a deal to provide flights for package holiday giant TUI AG, according to people familiar with the matter, striking a fresh blow in its battle against online travel agents.

A Ryanair partnership with the German travel company could be announced as soon as Thursday, one of the people said, asking not to be named before a deal is final. The talks with TUI follow an agreement Ryanair reached in January with online travel firm Loveholidays, under the condition that no mark-ups were allowed on the Irish discounter’s flights, the person said.

A spokesperson for TUI, which draws more customers from the UK and Germany than any other markets, declined to comment. Ryanair, the third most-active carrier in both countries, also declined to comment.

A deal would give travelers another way to bypass online agents and arrange holidays on Ryanair flights. The low-cost carrier’s chief executive officer, Michael O’Leary, has branded sites such as Booking.com and Lastminute.com as “pirates,” and called on regulators in UK and the European Union to halt their practice of adding fees for services such as changes to a Ryanair itinerary.

Ryanair shares reversed earlier losses following the Bloomberg report, ending up 0.2% in Dublin. TUI, which is switching its main listing to Frankfurt, fell 6.3% in London.

The online aggregators act as middlemen arranging for flights, hotels, car rentals and other travel services. They have accused Ryanair, Europe’s largest discount airline, of abusing its market dominance by disrupting their services. In December, many of the sites unexpectedly dropped Ryanair flights from their listings.

The move caused a drop in demand at Ryanair, which has since started to reach separate deals with individual sites. In addition to Loveholidays, Ryanair has also sealed a partnership with Kiwi.com.

TUI, Europe’s biggest package-tour company, operates its own flights, as well as cruises and hotels. It has faced recent competition from EasyJet Plc, whose own package-tour business has been rapidly expanding.

Read More: EasyJet Holidays’ Rapid Takeoff Should Concern Tour Operators

An alliance with Ryanair would allows TUI to tap the Irish airline’s broad network for to offer more flights to its customers. It currently operates its own airline fleet, and allows customers to choose flights from other carriers, including EasyJet, Norwegian Air Shuttle ASA, Eurowings and Wizz Air Holdings Plc.

TUI Chief Executive Officer Sebastian Ebel said on Tuesday that the company wanted to close the “gaps” in its offering by adding more flights from discount carriers.

Ryanair originated more than 33,000 passenger flights from the UK during the fourth quarter, according to data provided by Cirium Diio, trailing only EasyJet and British Airways.

In Germany, Ryanair was surpassed only by Deutsche Lufthansa AG and Eurowings on the same basis.

(Updates with share trading in fifth paragraph, market share)