- Shares up 13% in morning trading
- Agreement made to access Ryanair’s seat supply
- Better relationship between OTB and Ryanair
Shares in On The Beach (OTB) rose over 13% to 159p in morning trading as the online package holidays in the sun seller announced a long-term distribution agreement with budget airline Ryanair (RYA).
The shares are down 5% over the last year compared with a 3% drop in the FTSE All-Share index.
The agreement allows On The Beach to freely access Ryanair’s seat supply with ‘increased price transparency’ whilst ‘also enabling On The Beach to continue to offer its customers flexible payment plans, perks and ATOL protection.’
The company also said the agreement will ‘ensure a better public relationship between the two groups.’
In this statement On The Beach is referring to recent comments made by CEO Michael O’Leary referring to online travel agents (OTA) as ‘pirates’ over charging customers for flights.
‘Ryanair continues to campaign against these OTA pirates and continues to call upon governments and consumer agencies to take action to prevent this internet piracy and blatant anti-consumer mis-selling,’ O’Leary told the press last November.
EXPERT VIEW
Analysts at Shore Capital were positive about On The Beach's tie up with the low budget airline.
They said in a research note: ‘The news reiterates, to us, the need Ryanair has to work with online travel agents to fill its seat supply, noting it has previously announced three other similar deals including one with TUI.
‘By giving consumers direct access to their booking through Ryanair accounts, it implies that the customer data will be shared between the OTA’s and Ryanair, which could further benefit Ryanair’s future customer acquisition strategy.
‘We have previously flagged growing competition from low-cost carriers, within the short-haul beach market, as a potential risk for On The Beach. However, the strong On The Beach brand and growing proposition into premium and long haul should support the group’s market position, noting that despite this increasing competition, trading appears robust with a record forward order book and year to date total transaction value tracking ahead of expectations.’
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