Michael O’Leary said that rising fuel costs and ticket prices will drive punters to his low-cost airline
Ryanair CEO Michael O’Leary gestures as he holds a press conference in London, Britain, August 30, 2022 © AFP / Niklas Halle’n
Ryanair CEO Michael O’Leary told reporters on Monday that his rivals will suffer more in a coming recession, as customers “trade down” to his low-cost airline. With fuel prices skyrocketing, O’Leary predicted fewer travelers choosing full-service airlines like BA and Lufthansa.
Speaking at a press conference in London, the Irish airline magnate announced that Ryanair is set to overtake EasyJet as the UK’s largest carrier after expanding over the summer, and will “grow stronger in a recession.”
“Consumer price inflation is going to be nothing compared to the energy shock coming this winter,” he continued, before explaining that having factored high fuel prices into its plans for the year, the stripped-down nature of Ryanair’s operation would put it in a better position to survive than its competitors.
“In every consumer downturn, we grow faster,” he said. “What we see is far more people trading down to the lowest fare operator, like Ryanair.”
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“The question is: How’re you going to be able to afford to fly on BA or Lufthansa?” he asked. “You’d be crazy not to be worried about a looming recession and energy challenges but we at Ryanair are heading into winter with a fortuitous situation.”
Energy prices have spiked worldwide owing to a combination of factors. An increase in demand as countries emerged from the coronavirus pandemic was compounded by market shocks following the outbreak of the conflict in Ukraine. The UK and EU’s decision to sanction the Russian economy and cut themselves off from Russian energy imports have also driven prices to record highs, and sparked fears of rationing this winter.
Jet fuel is currently more than twice as expensive in Europe as it was a year ago, according to figures from the International Air Transport Association.
Amid this energy crunch, O’Leary predicted that air fares would continue to rise by between 3% and 5% in the coming years. “The era of low fares is not over but the €9.99 fares, really cheap and cheerful fares, are over for a couple of years,” he said. O’Leary issued a similar warning earlier this month, telling the BBC that his airline would no longer be able to offer flash sales, where it used to sell seats for as little as €1.
