Ryanair entered the Irish and UK credit card market yesterday, launching a new card that gives customers a free Ryanair return flight after the first purchase using the card.
Customers will receive a further free return flight if 10 flights are booked and paid for using the credit card which is branded Ryanair.com, within one year.
The card is issued by MBNA Europe, which has built up a 20 per cent share of the credit card market since it arrived in Ireland in 1997.
"They have the product and we have the passengers," said Mr Michael Cawley, deputy chief executive of Ryanair. The low fares airline is aiming to carry 24 million passengers a year to destinations around Europe by 2004.
To mark its credit card launch, Ryanair has announced it will sell up to 50,000 seats on flights to the UK for €1, plus taxes and charges, until midnight tomorrow.
Credit card bookings on Ryanair.com currently account for 94 per cent of Ryanair's total flight sales. Customers are charged card handling fees when booking through the site and these charges will continue to apply even when the Ryanair card is used.
Mr Cawley said he expected income from the MBNA alliance would become the airline's third-biggest additional online revenue stream, after its hotel booking service and links to the car hire firm, Hertz. Ryanair is seeking seven-figure income from the product, he added.
Mr Ian O'Doherty, regional director of MBNA Ireland, denied that the recent increase in Government stamp duty on credit cards from €19 to €40 meant it was a bad time to launch a new card. MBNA believes the stamp duty increase will prompt people to reduce the number of credit cards they hold and look for the one that offers what they feel is the best value.
Interest rates on the Ryanair product are 16.9 per cent APR on the standard card and 14.9 per cent on gold card purchases. Balances transferred to the new card are liable to interest of 1.9 per cent APR for up to six months, but this introductory rate does not apply to balances transferred from another MBNA card.
The product, which was developed in association with Ryanair's online financial services partner, 123.ie, also includes travel accident insurance.
